Lyft (LYFT) got clobbered after management’s second-quarter revenue and adjusted EBITDA forecast fell short of estimates and the company reported a wider-than-expected loss. Revenue of $875.6 million, however, was ahead of estimates.
A post-earnings sell-off like this is exactly why we exited our position prior to the announcement. Now that earnings are behind us, we can take advantage of still-elevated volatility levels by selling a put.
You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
Current Stock Price: $22.28
Net Debit: $2.76
Action: Sell to open the LYFT May Monthly (5/20) 20 Put
Current Option Price: $.47-$.51
Recommended Limit: Set your initial limit order at $.49, but adjust as needed to sell a put today
New Net Debit: $2.27
Expiration: After the close on Friday, May 20
Potential Rate of Return: I am targeting break even for this position