Failed breakout. Fading momentum.
After briefly breaking above its multi-week consolidation, Snowflake Inc (SNOW) printed a strong bearish candle on Friday, August 1 — closing more than 8% lower on volume near 9M shares. Price rejected the highs and sliced below the 50-day SMA.
While it initially resembled an Evening Star formation, the confirmation wasn’t fully there. Instead, this appears to be a textbook false breakout, with buyers trapped above the prior highs.
📉 No bullish follow-through. Heavy selling into strength.
Setup Selection
With the failed breakout and weakening short-term structure, this was a clean candidate for a tactical call credit spread — positioned just above recent highs.
Implied volatility remained favorable, and the 10-delta threshold was met at the 222.5 strike.
This setup doesn’t require another sell-off.
We simply want price to remain below key resistance while theta does the work.
Why Bear Call Spread?
→ Defined risk.
→ Strong reward-to-risk.
→ Limited upside expected after reversal.
The structure leans into the exhaustion of buyers and benefits from sideways-to-lower movement.
Trade Structure
Out of several variants modeled, this one offered the best premium relative to risk and placement above resistance:
Expiration: August 8, 2025
Short Call: 222.5
Long Call: 227.5
Contracts: 14
Credit Received: $0.37
Broker Fees: –$33.31
Target Profit (net after fees): $485
👉 View on OptionStrat
👉 View in Trade Log
Entry and Exit Plan
Position was opened Monday morning, August 4 — after price confirmed breakdown and rejected the prior range.
→ If SNOW stays under 222.5 and we capture most of the premium before Friday, I’ll close early. No reason to wait for expiration.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.