Chewy (CWHY) is down sharply today after beating revenue and earnings estimates for the fourth quarter. Investors took issue with the online pet retailer’s flat guidance and continuing declines in active customers.
We have traded CHWY successfully numerous times in the past, and I think today’s sell-off is an overreaction. I am recommending we sell a put that is more than 8% out of the money to capitalize on the heightened volatility in the shares.
Current Stock Price: $34.93
ACTION: Sell to open CHWY Mar Week Five (3/31) 32 Put for around $0.39. You can go as low as $0.31, but please don’t start there and always use limit orders.