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Tony Zhang Sees Unusual Options Activity In Peloton

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On CNBC's "Options Action," Tony Zhang spoke about unusually high options activity in Peloton Interactive Inc (NASDAQ: PTON). More than $4 billion of Peloton's market cap was wiped out on Wednesday on the news of the treadmill recall. The company is also scheduled to report earnings on Thursday, so it is not surprising that the options market was trading fairly active. Around 500,000 contracts traded, which is almost seven times the average options volume, said Zhang.

During the session on Wednesday, a put condor trade caught Zhang's attention. About 740 contracts of the June $70/$80/$90/$100 put condor were sold for a credit of $3.30. The trader sold the June $100 put and the June $70 put and bought the June $80 and the June $90 puts, receiving the credit of $3.30. Zhang said the trader is betting that Peloton will be below $70 or above $100 by the June expiration, making around $250,000 if that is true and risking around $500,000 if the stock stays between $80 and $90.

See also: How to Buy Peloton (PTON) Stock

 

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Posted-In: CNBC Options Action Tony ZhangOptions Markets Media

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