Monetive Trade Idea

OKTA selloff is a buying opportunity

OKTA has sold off on news that they got hacked and it impacted 366 customers. Now security breach is bad news for anyone but for an authentication company, this news looks worse. Needless to say the selloff was deep.

We believe the selloff is overdone and the company will recover.

Quick explanation of the levels for this trade:

• We are buying a July call vertical (buy 165C and sell 175C) and financing the trade selling a 110 Put. The trade is a credit of $1.80 The risk is a margin held for the short Put. If it goes below 110 you can be forced to buy 100 shares.

• 115 is just above the Covid Lows of 2020; 165 was yesterday’s close ; 175 is below the 50 Day EMA

• OKTA reports on May 26. July will give enough time for the stock to adjust after earnings.

• OKTA last reported on March 2, beat on revenue and eps and guided up for next quarter

Here are some details on the company: