GitLab (GTLB) Might Be a UFO!
Well I couldn't resist touching that weird leaf again and now I'm even more of a Tanooki Alien! I mean Tanooki Human!
After finishing the GTLB trade I placed on Thursday the very next day, I saw it was down again this morning and quickly scooped it up before it started rising again. I'll discuss why I still think it's a UFO, but first...
What's the Word on the Street?
As I write this, the market is mostly up with the Russell being the exception.
Investors are waiting for 2 data releases later this week to get a better read on inflation. First is PPI (Producer Price Index) on Wednesday and then CPI (Consumer Price Index) on Thursday. Both will show how producers/manufactures and consumers are dealing with inflation. Though I will note that neither are the Fed's preferred inflation gauge (that would be the PCE), but investors tend to watch closely regardless.
GitLab (GTLB)
What Is It?
Gitlab, Inc. provides code hosting and collaboration platform services. It offers continuous integration, source code management, out-of-the-box pipelines, agile development, and value stream management. The company was founded by Dmitriy Zaporozhets and Sid Sijbrandij in 2011 and is headquartered in Dover, DE. The listed name for GTLB is GitLab Inc. Class A Common Stock.
Why Is It a Possible UFO?
Primarily its current share price relative to its fair value, what other option traders expect, and its volatility are the reasons GTLB could be a UFO.
What About Recent News?
There's nothing new since I last wrote about GTLB. Basically, it posted earnings last week that beat expectations, but issued weaker-than-expected revenue guidance.
What's the Current Price?
GTLB is still down quite a bit in the past year. In the past 3 months it's down ~6%, but up ~15% in the past month. It's down on the week over ~2% and when I got this trade, it was down on the day before rising.
What’s the Fair Value?
I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…
Since GTLB most recent earnings report on 09/03/2025, it has received 12 ratings and taking the average, the fair value might be somewhere around: $53.67.
11 ratings are a Buy and 1 rating is a Hold. The lowest price target is $44, while the highest is $70.
What Do Options Traders Expect?
Calls are trading over equidistant Puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $40 Put it says $0.90, it’s $1.10 for the equidistant Call at $51.
The premium (the credit you receive for executing the trade) is currently less for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go up, rather than down.
How About Volatility?
The IV rank (the purple line) for GTLB (stock price in blue) is currently hovering around 31.72, which is somewhat elevated (IV rank goes from 0-100). This makes short strategies (which are what I prefer) more attractive.
What's the Trade?
My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value.
Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.
GTLB does not offer a dividend, but that’s not a dealbreaker!
It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral.
So if you saw the most recent image above, I already STO (sold to open) 2 contracts of the $40 Put for the October 24th expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.
When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.
What About Alternative Trade Ideas?
- If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
- Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.
Completed Trades
Dino Silvestro
BTC with 54.40% profit
Dino Silvestro
BTC with 50% profit
Dino Silvestro
BTC with 50% profit
Wait…Where Are the Candlesticks? And All the Other Indicators?
I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing.
As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.
Disclosures
- I currently have an open trade with GTLB (as mentioned in this post).
- No trade is a sure thing. There is always risk involved.
- This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.