Trade Desk’s stock dropped almost 40% after the CFO announced her departure. In the second quarter, the company’s revenue surpassed predictions by $8 million, totaling $694 million, while the adjusted earnings per share (EPS) met expectations at $0.41. Despite this revenue boost, the stock fell to $53.75, reflecting a 39% decline during the morning. In contrast, the broader market indices, including the DJIA and NASDAQ, were trending upward while Trade Desk’s stock slid downward.

CFO Departure and Market Impact

Laura Schenkein, the outgoing CFO, will remain until the end of the year to help transition to her successor, Alex Kayyal. CEO Jeffrey Green noted strong performance in the Connected TV sector and improved client interactions via platforms like Kokai and OpenPath. Schenkein expects Q3 revenue to hit $717 million, marking a 14% increase from last year. She also anticipates adjusted EBITDA of $277 million, slightly exceeding Q2 results. Analyst Jessica Rief Ehrlich lowered her price target for Trade Desk stock by 58%, bringing it down from $130 to $55 and changing her rating from Buy to Neutral. The stock has now dropped below key moving averages, with potential support seen in the $43 to $47 range. Further assessments suggest the stock needs to stabilize before any recovery can happen. Given today’s date, August 9, 2025, the sharp drop in Trade Desk stock creates a major opportunity for derivative traders. The significant decline has led to implied volatility surging above 85%, far beyond its average of around 45% over the past year. This makes selling options more appealing than buying them.

Options Opportunity Amidst Volatility

We think the market has overreacted to the CFO’s departure, especially since the company’s fundamentals remain strong. The revenue beat in Q2 and the positive guidance for Q3 indicate that the business is performing well. Thus, we see a chance in selling cash-secured puts or starting bull put spreads with strike prices around the technical support level of $45 for September or October expirations. This strategy allows us to collect high premiums while giving the stock a chance to stabilize and recover. In early 2024, we observed a similar situation when a management change at another tech firm caused a 25% drop, which was recovered within two quarters thanks to solid operational results. Currently, the high cost of options makes buying calls risky since the stock would need a sharp rebound just to break even. The CEO’s confidence in Connected TV is backed by recent industry data. A July 2025 report from Nielsen showed that CTV ad spending grew 21% year-over-year in the first half of the year, a trend we expect to continue. This external data supports the company’s optimistic outlook for its core growth area. Over the next few weeks, we will monitor the stock for a base, likely in the $43 to $47 range mentioned by analysts. A period of consolidation here would signal that the panic selling is at an end. This would be an ideal time to take advantage of the elevated volatility before it begins to decline as uncertainty diminishes. Create your live VT Markets account and start trading now.

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