Tech stocks remain on fire, as the Nasdaq-100 hits another new all-time high today. Oracle’s stock has climbed a remarkable 373% over the past three years, driven primarily by the artificial-intelligence boom. As investors flock to the cloud giant and the stock is in price discovery mode after a variety of recent headlines, I want to use options to create an income stream on this nearly $1 trillion non-Magnificent Seven name. The giant software company that Larry Ellison founded and still controls has had an incredible 2025 (up 82% year to date), experiencing a massive increase in new business from the artificial-intelligence boom. For a moment, that run-up made Ellison the richest man on the planet. His greater than 40% stake in Oracle is currently worth about $350 billion. On Sept. 10, Oracle soared 36% (its best daily performance since 1992) after announcing a massive backlog of nearly $500 billion. Oracle reported a multibillion-dollar cloud contract backlog, driven by demand for its AI-integrated cloud infrastructure. This includes partnerships with major tech firms, with Oracle’s cloud services powering AI workloads for companies like OpenAI and others. This added ~$244 billion to its market cap, pushing the stock to an all-time high of $345.72 and nearing a $1 trillion valuation. As investors debate what Oracle’s margins may actually be on newly found AI business, volatility in the stock has created a higher option premium environment. I want to capture this elevated premium by selling a put spread. Selling a put spread allows an investor to potentially create income on a company that they also feel comfortable owning at these levels. Despite the parabolic move in Oracle, I still want to own this essential name and I am comfortable potentially owning a little more up here. If you are not sharing my perspective, you can always take the other side of this trade. The trade Sold the Nov. 7 $300 put for $17.25 Bought the Nov. 7 $275 put for $7.25 This credit spread collects $10 or $1,000 per one lot ORCL was roughly trading $301 upon this execution If Oracle settles above $300 on expiration, an investor collects the entire $1,000 of premium. In the event Oracle settles below $300 there is risk in being put to the stock. This trade does have a max loss of $1,500 since the position will be stopped out at $275 by owning the downside put. DISCLOSURES: Kilburg sold this ORCL spread and is long Oracle. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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