🎯 $lululemon athletica (LULU) Options Strategy: Bull Put Spread (Credit Spread)
- 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).
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
