🎯 $lululemon athletica (LULU) Options Strategy: Bull Put Spread (Credit Spread)

$Lululemon Athletica(LULU)$

- Underlying: LULU

- View: Cautiously optimistic, expecting consolidation with a potential bounce from oversold levels, but not a strong bullish breakout. Aim to profit if the stock stays above a defined support level.

- Strategy Type: Credit Spread / Defined Risk

- Option Contract Portfolio:

- Sell 1x LULU 19 May 2026 $140 Put @ $2.05 (Mid-Price)

- Buy 1x LULU 19 May 2026 $135 Put @ $1.06 (Mid-Price)

- Max Gain & Loss: Max Gain: $99 per spread. Max Loss: $401 per spread.

- Initial Cost/Credit: Initial Credit of ~$0.99 per share ($99 per spread).

- Greek Exposure (Simulated):

- Delta: ~ +0.15 (Slight positive directional bias)

- Theta: ~ +0.04 (Positive time decay, earns ~$4 per day per spread)

- Vega: ~ -0.03 (Slightly negative, benefits from decreasing IV)

- Gamma: ~ -0.02 (Low)

- Rho: ~ +0.01 (Low)

- Rationale: This strategy aligns with a "cautiously optimistic, short-term oversold bounce" view. It collects premium (positive Theta) by selling a put at a support level ($140) while defining risk by buying a lower-strike put ($135). The positive Delta captures a modest move higher. The IV percentile (55.78%) is moderately high, making selling premium attractive. Profit is maximized if LULU closes above $140 at expiration. The risk is defined and limited to the width of the strikes ($5) minus the credit received.

- Time Frame: Short-term (3 weeks to expiration).