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Two ways to trade new Dow stock Salesforce for upside after pullback - CNBC

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Dow stock Salesforce has pulled back 11% this month, but Todd Gordon, managing director at Ascent Wealth Partners, is betting on a rebound.

He says the company is best in class in the software space.

"With so many technology companies going to the subscription model, their potential market just continues to grow, plus they increased revenue by selling add-on services. They have a very deep moat. It's really hard to penetrate, they're really a first mover, really sticky relationships. They are the premier SaaS which is a new acronym for software as service stock. They have a long history of posting record revenue quarter over quarter," Gordon told CNBC's "Trading Nation" on Thursday.

Salesforce posted $1.44 per share in profit for its fiscal second quarter, which it reported in late August. Analysts had expected earnings of 67 cents a share. Sales also came in above estimates.

"We hold CRM in our global growth portfolio, we are considering adding here. If you don't own the stock this may be a time to do so. If you're an option player and you'd like to do it, I've got kind of an interesting strategy set up for you here," said Gordon.

One way to play the stock is through a put credit spread, he said. To do this, he is selling the 250 put and buying the 230 put with October expiration.

"What you can then do is take that credit and apply it to the purchase of an upside call so selling a 250 put, buying a 230 put so it would be a credit received for which you'll apply to the upside 280 call," said Gordon.

For a simpler options trade, he said a trader could buy an at-the-money call – purchasing a 250 call and selling a 280 call. This is a bet that Salesforce can climb as high as $280. It was trading at $241.34 on Friday afternoon.

Disclosure: Ascent Wealth Partners holds CRM. 

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