Salesforce & Snowflake earnings: Earn income from volatility
Key points:
Salesforce and Snowflake report earnings on 27 May, with the options market pricing in large one-day moves: around 7.7% for CRM and 12.1% for SNOW.
In our view, for investors who already have the willingness and cash capacity to own these stocks at lower levels, cash-secured puts can be used as a conditional entry strategy while collecting elevated option premium.
The potential benefit is upfront premium and a lower effective entry price; the risk is being assigned if the stock falls sharply after earnings, with losses possible if the share price keeps falling.
What is a cash-secured put?
A cash-secured put, or CSP, means selling a put option while keeping enough cash aside to buy the stock if assigned.
In simple terms, the investor is saying:
“I am willing to buy this stock at this strike price. If the stock does not fall there, I keep the premium.”
For example, selling one put option usually represents 100 shares. If an investor sells a $165 put, they should have enough cash to buy 100 shares at $165, or $16,500, if assigned.
A CSP is not just an income strategy. It is best understood as a conditional stock entry strategy.
When does a CSP make sense?
A CSP may suit investors who:
Like the stock but prefer to enter at a lower price.
Are comfortable owning the shares if the stock falls.
Believe implied volatility is elevated before earnings and may fall after the event.
Want to collect premium instead of placing a passive limit order.
The potential benefit is that the investor receives premium upfront and may be able to enter the stock below the current market price. The trade-off is that the investor gives up upside if the stock rallies sharply and still carries meaningful downside risk if the stock falls below the strike.
In our view, CSPs work best when the investor is genuinely willing to own the stock at the effective entry price and has set aside the full cash amount required for assignment.
Key risks
The main risk is that the stock falls sharply below the strike. In that case, the investor may be assigned and own the shares at a loss versus the market price.
Other risks include:
Earnings gaps can be large and fast.
Premium received may not fully offset a sharp decline.
Cash is tied up while the position is open.
If the stock rallies, upside is limited to the premium received.
Liquidity, bid-ask spreads and early assignment risk should be considered.
The market is offering elevated premium for a reason. Earnings risk is real, and the premium should not be viewed as a free return.
Strategy 1: Salesforce — CRM
Current stock price: around $180.07
Earnings date: 27 May 2026
Options expiry: 29 May 2026
Implied one-day move: around 7.7%
Implied downside level: roughly $166
The options market is implying that a move toward the mid-$160s is within the expected earnings range.
Illustrative strategy: Sell CRM $165 put
Indicative premium: around $2.25 mid-price, which means the investor receives about $225 upfront per contract
Effective entry price if assigned: around $162.75
Cash required per contract: around $16,500
CRM setup
This strategy works best if CRM stays above $165 after earnings. In that case, the investor keeps the premium and is not assigned.
If CRM falls below $165, the investor may be assigned and effectively owns CRM around $162.75, after accounting for the premium received.
Investor lens: CRM is down around 33% YTD, so this is less about chasing momentum and more about using elevated earnings volatility to define a lower potential entry point. In our view, the $165 strike gives some room for the implied earnings move while still offering premium. However, if earnings disappoint or guidance weakens, CRM could fall well below the effective entry price and the premium may only provide limited protection.
Strategy 2: Snowflake — SNOW
Current stock price: around $172.20
Earnings date: 27 May 2026
Options expiry: 29 May 2026
Implied one-day move: around 12.1%
Implied downside level: roughly $151
Snowflake has a much larger implied earnings move than Salesforce, which means the market is preparing for greater gap risk.
Illustrative strategy: Sell SNOW $150 put
Indicative premium: around $3.00 mid-price, which means the investor receives about $300 upfront per contract
Effective entry price if assigned: around $147.00
Cash required per contract: around $15,000
SNOW setup
This strategy works best if SNOW stays above $150 after earnings. In that case, the investor keeps the premium.
If SNOW falls below $150, the investor may be assigned and effectively owns SNOW around $147, after accounting for the premium received.
Investor lens: SNOW carries higher earnings gap risk, so strike discipline matters even more. SNOW is down around 22% YTD, but it has rallied more recently, which makes the earnings setup less clean. In our view, the $150 strike is a more conservative illustrative level than chasing richer premium at $155 or $160. The risk is that a sharp post-earnings gap lower could still leave the investor owning the stock below the effective entry price.
Quick comparison
| Stock | Current price | Implied move | Implied downside | CSP strike | Indicative premium | Effective entry |
|---|---|---|---|---|---|---|
| Salesforce | $180.07 | 7.7% | ~$166 | $165 put | ~$225 | ~$162.75 |
| Snowflake | $172.20 | 12.1% | ~$151 | $150 put | ~$300 | ~$147.00 |
Bottom line
For investors who are already willing to own Salesforce or Snowflake at lower levels, cash-secured puts can turn elevated pre-earnings volatility into a potential entry strategy.
The benefit is clear: premium is received upfront, and the effective entry price is below the current market price if assigned. The risk is equally important: earnings gaps can be severe, and the investor may be required to buy shares even if the stock has fallen well below the strike.
In our view, the cleaner approach is to avoid selling puts too close to spot. For this earnings week, CRM $165 and SNOW $150 appear more aligned with the options-implied downside range and open-interest profile. These are illustrative examples only, not recommended trades.
The key discipline: only sell the put if you would be comfortable owning the stock at the effective entry price and can tolerate further downside. Earnings premium can look tempting, but the market is not offering it for free.
New to options? Start with our article on how CSPs work and the risks before trading.
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