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Hawk’s Nest

Struggling Fitness Innovator Sees Opening Put Seller

by | Oct 18, 2022

Peloton (PTON) with 700 January 2025 $10 puts sold to open 4.80 as the stock sits near 7.80 and tries to form a base with rumors swirling of the company either selling itself to a large peer like Nike, Apple or Lululemon. This opening put sale being ITM shows confidence in these levels and the kind of trade that you might open if playing for a takeover but not sure how high the buyout premium might be. If PTON does get bought out it likely is capped between 13-15 at this point so selling these LEAP puts stands to gain very well as the 10 puts would expire worthless or drop significantly if a deal is announced. If not a fan of selling naked puts then buying the January $10/15 call spread at $0.70 is a cheap shot.