Chewy (CHWY) is back in favor on Wall Street with shares up around 11% over the past three months, and that’s taking into account today’s sell-off.
The company continues to benefit from bullish trends in pet ownership and spending. For more on those trends and how Chewy is capitalizing on them, check out this recent post from The Robin Report.
We’ve had great success trading Chewy in the past, taking advantage of the large premiums in its option chains. Today, I am recommending we sell a put that is nearly 9% out of the money.
Current Stock Price: $40.45
Action: Sell to open CHWY Jan Week Four (1/27) 37 Put
Current Option Price: $0.32-$0.37
Recommended Limit: Set your initial limit order at $0.35. You can go as low as $0.30, but please don’t start there and always use limit orders.
Expiration: After the close on Friday, Jan. 27
Potential Rate of Return: 0.9% in nine days, or 38% annualized, if this option expires worthless