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Scott Bauer's Lululemon Options Trade

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On Bloomberg Markets, Scott Bauer spoke about an options strategy in Lululemon Athletica inc. (NASDAQ: LULU) ahead of the December 6 earnings.

He decided to use the iron condor strategy as he was hoping that the stock is going to stay in the range. Bauer sold the December 117/115 put spread and the December 144/146 call spread for a total credit of $0.90. If the stock stays between $117 and $144 at the December 7 expiration, he is going to collect $0.90, which is the maximal profit for the trade. He starts to lose money below $116.10 and above $144.90 and he can maximally lose $1.10.

Editor's note: Lululemon beat Q3 top- and bottom-line estimates. Shares were up marginally in Friday's pre-market session.

Posted-In: Bloomberg Markets Scott BauerOptions Markets Media

 

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