🐋 DDOG $9.8M Two-Year LEAP — Patient Money Bets on the AI-Observability TAM Expanding to $51B by 2027

📅 June 1, 2026 | 🔥 Unusual Activity Detected

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🎯 The Quick Take

Someone just crossed $9.8 MILLION into DDOG $300 calls expiring June 2028 — a 2-year LEAP that has nothing to do with this week's news and everything to do with a structural multi-year wager on AI-powered observability becoming a trillion-dollar infrastructure layer. With DDOG just off its first-ever $1B+ revenue quarter and DASH 2026 (the flagship product conference) arriving in 8 trading days, the timing is deliberate. This is patient institutional money building a position, not a gambler chasing a quick earnings pop.

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📊 Company Overview

Datadog, Inc. (NASDAQ: DDOG) is the leading cloud-native observability and security platform — the system that tells engineering teams when their applications are slow, broken, or under attack.

• Market Cap: ≈$88.0B (as of May 2026) per Capital.com
• Industry: Application Software (SaaS) — Information Technology
• What they do: Real-time monitoring for cloud infrastructure, applications, logs, security, and now LLM/AI agent workloads. Think of Datadog as the "control room dashboard" for every major cloud application running on AWS, Azure, or Google Cloud.
• Current price: ≈$273.63–$276.69 (spot range today)
• Why this matters now: The company just posted its first-ever $1B+ quarter in Q1 2026 — and the AI-observability product line that monitors LLMs and AI agents is only now inflecting.

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💰 The Option Flow Breakdown

🤝 BLOCK CROSS — June 1, 2026 @ 12:07:42 ET

Flow Type: 🤝 BLOCK CROSS (negotiated, condition 127 — single-leg facilitated cross) Order Type: BTO (Buy to Open) — confirmed fresh opening long Vol/OI: 1,000 vs 48 prior OI — Volume is 20× prior open interest, volume GREATLY exceeds prior OI, confirming this is overwhelmingly a new position, not a close. Aggressor: ≈60% across NBBO — mild buy-lean, consistent with a negotiated cross where the buyer leaned slightly toward the offer on a large facilitated block.

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✅ OI UPDATE (2026-06-02) — BTO LEAP CONFIRMED

Last updated: 2026-06-02 — open/close confirmed by next-day OPRA OI.

The strike's open interest rose by 1,001 contracts — almost exactly the 1,000-contract BUY — confirming this 2-year LEAP is a fresh open (BTO). The patient AI-observability LEAP thesis stands as written; the position is now on the books and will ride DASH 2026 (June 9-10), Q2 earnings Aug 6, and the subsequent 8 earnings prints through June-2028 expiry.

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🤓 What This Actually Means — Plain English

Real talk: A 2-year LEAP like this is not your typical options play. Let's decode it piece by piece.

What a LEAP is: A LEAP (Long-Term Equity Anticipation Security) is just an option with a long time to expiry — in this case, 2 full years. Instead of betting that DDOG moves by Friday or next month, this buyer is saying: "I believe DDOG will be meaningfully higher in June 2028 than it is today, and I want leveraged exposure to that move with defined downside."

Why buy a LEAP instead of the stock?

• 💸 Capital efficiency: Paying $9.8M controls the equivalent of 100,000 shares ($27.4M in stock value). That's ≈2.8× leverage without borrowing a dollar.
• 🛡️ Defined downside: If DDOG completely implodes, the maximum loss is the $9.8M premium — not the full notional. A stockholder owning the equivalent notional could lose far more in a catastrophic scenario.
• 📅 Time to be right: With 24.5 months on the clock, this buyer can survive multiple earnings prints, a macro slowdown, or a quarter of soft guidance. Short-dated options kill you on timing; a LEAP gives you patience.

Why ≈10% out-of-the-money? The $300 strike sits ≈10% above today's spot of $273.63. To break even at expiration, DDOG needs to reach ≈$309.80 (the $300 strike + the $97.50 option premium paid). That's a ≈$36 (≈13%) climb from today over two years. For context, a company growing revenue at 32% YoY that compounds at just half that rate would blow through $300 well before June 2028. The OTM structure isn't reckless — it's a calibrated bet that the growth story stays intact.

What a BLOCK CROSS means: This print is a block cross, not an aggressive market sweep. A single broker matched a buyer and a seller and crossed the block off the open order book — meaning there's a known counterparty on the other side who took the opposite position. Read it as deliberate institutional positioning (a desk building multi-year bullish exposure), not frantic buying pressure. A $9.8M cross is $9.8M changing hands between two parties who already agreed on price — the deliberate, patient character of the trade matches the 2-year LEAP structure perfectly.

The structural thesis in one sentence: The buyer believes that Datadog's AI-monitoring platform — which now watches LLM performance, AI agent behavior, and cloud-native workloads for every major enterprise — is positioned at the center of a secular spending shift, and that the stock reflects only the first chapter of that story.

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📈 Technical Setup / Chart Check-Up

YTD Performance

DDOG has staged a dramatic recovery in 2026. After the Q1 2026 earnings beat on May 7 — the first $1B+ quarter — the stock gapped ≈31% in pre-market from ≈$144 to ≈$188, and has continued grinding higher as post-earnings analyst upgrades rolled in through late May, with BTIG raising to $255 on May 26, pushing DDOG to a new 52-week high. Today's LEAP buyer is entering after that re-rating, implicitly saying the post-earnings move is the beginning of the move, not the end.

Gamma-Based Support & Resistance

Current Price: ≈$276.69

Reading the gamma map from the GEX data — a net call-heavy book (all near-money strikes have positive net GEX, meaning dealers are long gamma and will act as a stabilizer/dampener):

🟠 Resistance Levels (Call Gamma Above Price):

• $280 — Immediate overhead ceiling; call GEX 0.130 (moderate). Dealers sell into rallies here.
• $290 — Next resistance cluster; call GEX 0.283. A meaningful hurdle — getting through this cleanly would be technically significant.
• $300 — THE key level for this LEAP trade; call GEX 0.378, the largest single call-gamma node in the visible range. This is where market-maker selling pressure peaks above the current price. Breaking $300 and sustaining above it is literally the LEAP buyer's target level — appropriately, the heaviest overhead gamma wall in the chain.

🔵 Support Levels (Put Gamma Below Price):

• $270 — Immediately below spot; call GEX still dominant (0.337), acts as a magnetic level — price tends to gravitate back here.
• $260 — Moderate support; total GEX 0.262.
• $250 — Secondary support zone; total GEX 0.370. A cluster worth watching on any pullback.
• $240 — Deeper floor; total GEX 0.397. Significant structural support ≈14% below current price.
• $220 — Major gamma wall at 0.546 — the deepest significant support in the chain.
• $200 — Largest single gamma concentration in the entire book (total GEX 0.375 with dominant call GEX 0.316), suggesting this is a floor that market makers defend aggressively on a deep drawdown.

Net GEX Bias: Overwhelmingly bullish call-dominant book. Market makers are net long gamma, meaning they'll buy dips and sell rallies — a stabilizing force that can frustrate both shorts and leveraged longs on short-dated timeframes, but is generally healthy for a LEAP buyer who just needs the stock to trend higher over 24 months.

Implied Move Analysis

Options are pricing in significant expansion over time — which actually validates the LEAP structure:

Translation for regular folks: The market is already pricing in the possibility of DDOG trading anywhere from ≈$232 to ≈$321 just through the June 18 expiration — that 17-day window contains the DASH 2026 conference (June 9–10). Over a year, the implied range expands to $101–$452. The LEAP buyer isn't fighting those ranges — they've bought a 2-year ticket knowing the ride will be volatile, and they've got plenty of time to be right.

The key insight: The June 18 upper implied range of ≈$321 is already well above the $300 strike. The $300 strike is NOT far-fetched within the option's own 2-year window — even the near-term implied move says $300 is reachable this summer if a catalyst fires.

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🎪 Catalysts

🔥 Near-Term (Next 0–30 Days)

DASH 2026 — June 9–10, NYC North Javits Center 🎪

The biggest single event for DDOG in the near term. Datadog's flagship annual developer conference is only 8 trading days away from this LEAP's opening date. DASH historically triggers a product-narrative reset: new observability modules, security product launches, partner ecosystem announcements, and pricing updates that analysts fold into models for the next 12 months. The LEAP buyer now has a front-row seat.

Expect focus on: next-generation AI Agent Monitoring capabilities, expansion of LLM Experiments and AI Agents Console (which shipped at DASH 2025), pricing innovations tied to LLM token/inference consumption metrics, and cloud security platform deepening.

📅 Q1 2026 Earnings — Already Reported (May 7, 2026) ✅

DDOG crushed Q1 2026: revenue $1.006B (+32% YoY) — the first $1B+ quarter in company history. EPS $0.60 beat $0.51 consensus. Customer count reached ≈33,200; 4,550 customers with ARR ≥ $100K (vs 3,770 YoY). Dollar-based net retention rebounded to "low 120%'s" from high-110%'s a year prior, driven explicitly by AI/LLM workload usage. Multi-product adoption accelerated: 56% of customers on 4+ products (vs 51%), 35% on 6+ products (vs 28%). The stock gapped +31% in pre-market — a print that reset analyst models upward across the board.

🚀 Medium-Term (1–6 Months)

Q2 2026 Earnings — August 6, 2026 (After Close) per TipRanks. The first full quarter under post-DASH product momentum. Consensus sits at ≈$1.075B revenue (+≈29% YoY), EPS ≈$0.58. Key watch items: does net retention push above 125%? Does management break out an LLM-observability revenue contribution? Any acceleration in multi-product attach rates above 56%/35% would be an upside signal.

Post-Q1 Analyst Upgrades 📊

The analyst community followed the earnings beat with a wave of price-target raises:

• BTIG raised to $255 (Buy) — most recent, triggered a new 52-week high on May 26
• TD Cowen raised to $235 (Buy) — May 7
• Daiwa raised to $240 (Buy) — May 13
• UBS raised to $220 (Buy) — May 8
• Barclays raised to $215 (Overweight) — May 8

Note: Even the most aggressive PT ($255, BTIG) is still ≈15% below the $300 LEAP strike — meaning this buyer is positioned for a more aggressive move than any current analyst target. They're not front-running a PT raise; they're making a structural multi-year call.

Google ADK + AWS Ecosystem Deepening 🤝

In February 2026, Datadog added automatic instrumentation for Google's Agent Development Kit — full visibility into agentic AI behavior, performance, cost, and safety built natively into every GCP AI-agent deployment. Combined with crossing $2B in cumulative AWS Marketplace revenue and the existing global AWS strategic partnership, Datadog now has go-to-market leverage inside all three major clouds.

📅 Long-Term (6–24 Months — Inside the LEAP Window)

Q3 2026 Earnings (estimated early November 2026) — the quarter where the DASH 2026 product cycle lands in numbers.

Q4 2026 / FY 2026 Print (estimated February 2027) — the annual report that would confirm whether Datadog maintained 25%+ growth through macro uncertainty.

DASH 2027 (estimated June 2027) — midpoint of the LEAP's life; another product cycle that could expand the narrative.

DASH 2028 (estimated June 2028) — lands inside the LEAP's expiry month. This is not a coincidence; the buyer has effectively positioned for the full DASH 2026 → DASH 2027 → DASH 2028 product-launch ladder. Every one of those conferences is a potential multiple-expansion catalyst.

LLM Observability as a Named Revenue Segment (60–70% probability in the next 12 months): Gartner forecasts 40% of organizations deploying AI will use AI observability by 2028, and 50% LLM-observability penetration by 2028. When Datadog starts reporting that ARR as a separate line — the way Snowflake broke out Snowpark — the multiple expands. Both Gartner timelines fall directly inside this LEAP's window.

The TAM Math: Datadog sizes its own TAM at ≈$51B by 2027 (observability $30B + cloud security $21B). At ≈$4.3B run-rate revenue today, that's a ≈12× revenue-to-TAM ratio with room to grow. The observability platform market itself is expected to expand from $41B (2025) to $62B+ (≈2028) — DDOG is structurally positioned in the fastest-growing segment of that market.

FedRAMP High Certification: Opens the U.S. federal and public-sector pipeline — typically a 12–18-month sales cycle, meaning revenue starts materializing in FY2027–FY2028. Squarely inside the LEAP window.

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🆚 Competitive Landscape

Datadog is not fighting from behind — it is the benchmark:

• vs Cisco/Splunk: The Cisco–Splunk bundle is the most credible threat; Cisco paid $28B for Splunk in 2024 and is now integrating ThousandEyes + AppDynamics + Splunk data into a unified platform. But per Hey Go Trade's observability war analysis, Datadog wins on cloud-native APM-metrics-logs unification and developer experience — the bundle is still "moving from slide decks to shipped product."
• vs Dynatrace: AI-first, large-enterprise positioning; FY26 guide ≈$2.0B — roughly half Datadog's run-rate. Slower-growth, lower-multiple competitor.
• vs New Relic (private): Mid-market/SMB focus; not a threat to DDOG's enterprise trajectory.
• Top-5 incumbents (Cisco, Microsoft, Broadcom, IBM, SolarWinds) still hold ≈45% of 2025 observability revenue — meaning Datadog's growth is coming from share displacement of legacy tools, not just net-new cloud spend.

The M&A angle is real but unlikely at current size: Cisco's Splunk acquisition raised buyout chatter around DDOG, but at ≈$88B market cap, a clean acquisition would be one of the largest software deals ever. The more realistic play is that DDOG remains independent and competes.

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🎲 Price Targets & Scenarios for the LEAP

Based on gamma levels, implied move data, and the 24-month catalyst calendar:

📈 Bull Case — "AI Observability Goes Mainstream"

Target: $330–$380 by mid-2028

How we get there:

• 💪 Revenue compounds at 28–32% YoY through FY2027 (maintaining Q1 2026 momentum)
• 🤖 LLM observability breaks out as a disclosed ARR segment, drives multiple re-rating
• 📊 NRR climbs above 125% as large enterprise AI workloads scale
• 🎪 DASH 2027 and DASH 2028 each deliver a product-cycle catalyst that resets models upward
• 🏛️ FedRAMP + public sector revenue materializes in FY2027 numbers
• 🟠 The $300 gamma wall (largest call-gamma node in the chain) is absorbed and DDOG trades above it sustainably

This is the scenario the LEAP buyer is playing for. The $300 call expires deep-in-the-money; the $9.8M premium could be worth $30M–$80M+ depending on how far above $300 the stock reaches.

🎯 Base Case — "Steady Compounder, Hits $300 Late in LEAP Window"

Target: $290–$315 by mid-2028

Most likely single path:

• ✅ Revenue grows 24–28% YoY — slight deceleration from Q1 2026's 32% but still premium growth
• 📉 Macro cloud-spend digestion in 2027 creates one soft quarter, stock pulls back then recovers
• 🔄 Stock oscillates between the $260–$300 gamma zone for 12+ months before DASH 2028 catalyst
• 💤 The LEAP finishes near or slightly above the $300 strike — a modest gain on premium vs buying stock outright

At-the-money at expiration means breakeven; above $309.80 is profitable. The base case is a "live and let compound" scenario.

📉 Bear Case — "Multiple Compression Wins"

Target: $220–$260 through mid-2027, recovery uncertain

What could go wrong:

• 😰 Rate re-rating compresses the multiple from ≈20× FY26 revenue toward 12–14× (Dynatrace-like), knocking stock toward $170–$190 even on unchanged fundamentals
• 🚨 Cisco-Splunk bundle traction displaces DDOG at 2–3 large accounts; NRR softens back to high-110%'s
• ☁️ AI/cloud-spend digestion in 2027 stalls usage growth; LLM observability fails to accelerate meaningfully
• 📊 The $300 strike expires worthless; buyer loses the full $9.8M premium

Gamma levels say $220 (total GEX 0.546) and $200 (total GEX 0.375) are the major structural floors on a deep bear-case scenario — market-maker positioning becomes a buyer at those levels.

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💡 Trading Ideas — 4 Ways to Think About This

🐢 LEAP / Patient Long-Term Investor (The Trade We're Analyzing)

This is exactly the right structure for patient capital. The buyer paid $97.50 per contract — a high per-share premium, but one that buys 24.5 months of defined-risk exposure to a $300+ target.

Why the LEAP structure makes sense here:

• 📅 Slow time decay: Theta on a 2-year LEAP is tiny relative to a short-dated option. You're not bleeding premium every day the stock doesn't move.
• 🎯 4 earnings prints inside the window — any one of which could be a 20%+ gap day.
• 🎪 3 DASH conferences inside the window — each a potential narrative catalyst.
• 🛡️ Defined downside — the maximum loss is what you paid; a stockholder has no such floor.

For someone who wants similar exposure at a smaller size: consider 1–5 of these contracts (not the full 1,000) if you believe in the multi-year AI-observability thesis. The trade scales naturally.

📊 Swing Trader — DASH 2026 is 8 Days Away

Near-term opportunity: DASH 2026 (June 9–10) is the most important single event for DDOG between now and August earnings. If Datadog announces a major new AI observability product, a consumption-pricing model for LLM tokens, or a notable enterprise partnership, the stock could test the upper implied-move range of ≈$320–$321 by June 18.

A near-dated call spread (e.g., buying the $290 call and selling the $320 call for the June 18 expiry) lets a swing trader play the DASH catalyst with defined risk. Cost would be far lower than a LEAP, but the window is tight — DASH must deliver.

Risk: If DASH underwhelms or is "in-line" with expectations, the stock could give back some of its post-earnings run toward the $260–$250 support zone.

💵 Premium Collector — Not Today's Structure

The LEAP structure is about buying premium with staying power, not selling it. A premium collector would be on the OTHER side of this trade: selling covered calls above $290–$300 to collect premium as DDOG approaches those gamma walls. If you own DDOG stock, the $290–$300 call gamma zone (highest in the chain) is where writing covered calls makes structural sense — the call GEX at $300 (0.378) suggests heavy dealer hedging that creates natural selling pressure and helps short calls expire worthless more often than chance would predict.

🌱 Beginner — The "Diversified Time" Lesson

Here's what a first-time options reader should take away from this trade: a LEAP is the options world's answer to long-term stock investing.

When you buy stock, you're betting the company grows over years and the stock follows. A LEAP does the same thing with less capital at risk and more leverage on the upside — but you CAN lose all of the premium you paid if the stock doesn't cooperate, whereas a stockholder always has the residual value. For an entry-level investor, the takeaway is: don't think about options only as weekly speculations. The same patient mindset that makes someone a good long-term stock investor also makes a 2-year LEAP perfectly sensible — the difference is just the risk/reward math and the defined downside.

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⚠️ Risk Factors

Don't ignore these:

• 📉 The $300 strike is ≈10% above spot — time and momentum both must work. The break-even is ≈$309.80 at expiration (June 2028). Below ≈$250 by mid-2027, the LEAP's time value starts to erode faster. If DDOG stays flat — no crash, just no progress — the LEAP buyer still loses the full $9.8M.
• 💸 Multiple compression is the biggest non-fundamental risk. At ≈20× FY26 revenue, DDOG is priced as a premium-growth SaaS. A re-rating to 12–14× (what Dynatrace trades at) would knock the stock toward $170–$190 even with the same revenue trajectory. Rising interest rates or a broad SaaS derating could do this with no fundamental deterioration at Datadog specifically.
• ☁️ AI/cloud-spend digestion in 2026–2027. Q1 2026 NRR rebound was driven by AI workload usage. If hyperscaler capex slows, DDOG's usage-based revenue model sees a direct mechanical impact — the way Snowflake felt the AWS capex digestion cycle.
• 🆚 Cisco-Splunk bundle execution. The most credible competitive threat is Cisco successfully integrating its acquisition and displacing DDOG at mid-to-large regulated enterprises on price. Per Hey Go Trade, it's still early-stage — but the risk window is 2027–2028, directly inside the LEAP.
• 🎯 Top-customer concentration in AI cohort. A small number of large LLM-native customers drive outsized usage variance. A single large customer churning or reducing spend could create an ugly earnings quarter.
• ⏰ A 2-year LEAP spans 4 earnings prints — accumulated misses compound. One bad quarter won't kill the thesis (the LEAP absorbs that via time value), but three consecutive soft quarters with narrowing NRR and decelerating multi-product attach rates would erode the $300 bull case materially. The buyer needs structural execution, not just a good quarter or two.

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🎯 The Bottom Line

Here's the deal: Someone just made a $9.8M, 2-year bet that Datadog becomes the default control plane for AI-powered enterprise infrastructure — LLMs, AI agents, cloud-native apps, and the security layer that monitors all of it. They chose a 2-year structure because this story doesn't play out in a week; it plays out across 4 earnings prints, 3 DASH conferences, and a potential LLM-observability revenue line-item disclosure that could re-rate the multiple.

What this trade tells us:

• 🎯 The buyer sees DDOG's Q1 2026 momentum (32% YoY, first $1B+ quarter, NRR rebound) as the beginning of an acceleration, not the peak.
• 🤖 The AI-observability TAM — ≈$14B by 2028 per Gartner, ≈$51B total by 2027 per Datadog's own sizing — is the multi-year fuel.
• 📅 DASH 2026 on June 9–10 is the first near-term test: new product launches there could narrow the gap to the $300 gamma wall faster than the 2-year horizon suggests.

If you own DDOG stock:

• ✅ This LEAP confirms you're in the right name — someone is paying $9.8M for 2-year leveraged exposure to the same thesis.
• 🎯 Watch the $270–$280 zone (current gamma center of gravity) as near-term support; $260–$250 as the deeper cushion.
• 📅 Mark June 9–10 (DASH 2026) and August 6 (Q2 earnings) as the next two volatility events.

If you're watching from the sidelines:

• 🎪 DASH 2026 in 8 trading days is the most actionable near-term entry signal — a strong product cycle could push DDOG toward $300 well before 2028.
• 🛡️ If you're not ready for the LEAP structure, a smaller near-term call spread on the DASH catalyst (defined risk, lower premium) captures the same narrative in a smaller package.
• ⏰ The $200 gamma wall (largest in the chain) serves as the absolute downside anchor on a deep drawdown — useful to know if you're planning a dollar-cost-average into DDOG stock on any macro-driven weakness.

Mark your calendar — Key dates:

• 📅 June 2, 2026 (tomorrow, ≈06:30 ET) — OI confirmation of this BTO (expect ≈1,048)
• 📅 June 9–10, 2026 — DASH 2026, NYC North Javits Center — AI observability product cycle
• 📅 June 18–19, 2026 — Weekly OPEX / Triple Witch (±$44 implied move, upper range ≈$321)
• 📅 August 6, 2026 — Q2 2026 earnings — NRR trajectory watch
• 📅 Early November 2026 — Q3 2026 earnings (estimated)
• 📅 February 2027 — FY 2026 / Q4 2026 print (estimated)
• 📅 June 2027 — DASH 2027 (estimated) — midpoint of the LEAP's life
• 📅 June 16, 2028 — DDOG 2028-06-16 $300 CALL expiration

Final verdict: This DDOG LEAP is one of the most clearly structured multi-year wagers we've seen in the flow — not a momentum scalp, not an event binary, but a 24-month fundamental thesis with defined downside and asymmetric upside if the AI-observability secular shift plays out as Gartner and Datadog management both expect. The $300 strike is ambitious today — and that is precisely the point.

Be patient. The catalyst calendar is dense. The thesis is structural. 💪

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Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance does not guarantee future results. The 1,000-contract LEAP opening reflects an institutional block-cross position with a multi-year thesis — it does not imply the trade will be profitable or that you should replicate it at any position size. LEAPs can expire worthless if the stock fails to reach the strike plus premium by expiration. Always do your own research and consider consulting a licensed financial advisor before trading options.

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About Datadog, Inc.: Datadog is a cloud-native observability and security platform (NASDAQ: DDOG) serving ≈33,200 customers across cloud infrastructure, APM, logs, security, and AI/LLM monitoring. Market cap ≈$88.0B. First $1B+ quarter achieved Q1 2026. Industry: Application Software (SaaS) / Information Technology.