Both Lululemon Athletica (LULU) and Peloton Interactive (PTON) have been hit hard in the past two weeks. I am recommending we roll our spreads down and out to the March monthly expiration.
LULU Feb Week Four (2/26) 310/300 Put Spread
Current Stock Price: $306.42
Net Debit: $4.54
Action:
- Buy to close the LULU Feb Week Four (2/26) 310 Put for around $3.50
- Sell to close the LULU Feb Week Four (2/26) 300 Put for around $0.30
- Set initial debit limit at $3.20, but adjust as needed
- Sell to open the LULU Mar Monthly (3/19) 290 Put for around $4.80
- Buy to open the LULU Mar Monthly (3/19) 280 Put for around $2.65
- Set initial credit limit at $2.15, but adjust as needed
New Net Debit: $5.59
PTON Feb Week Four (2/26) 125/115 Put Spread
Current Stock Price: $116.16
Net Debit: $2.80
Action:
- Buy to close the PTON Feb Week Four (2/26) 125 Put for around $8.75
- Sell to close the PTON Feb Week Four (2/26) 115 Put for around 1
- Set initial debit limit at $7.75, but adjust as needed
- Sell to open the PTON Mar Monthly (3/19) 105 Put for around $3.95
- Buy to open the PTON Mar Monthly (3/19) 100 Put for around $2.80
- Set initial credit limit at $1.15, but adjust as needed
New Net Debit: $9.40