Lululemon Options Show Potential Yield for Investors

Lululemon athletica inc presents new options for investors. The $390 put can offer a cost basis of $371.55, while the $400 call provides a potential 6.40% return. Attractive yields create interesting investment opportunities.

Date: 13-02-2025

AI Rating: 6

Earnings Per Share (EPS): The report does not mention EPS.
Revenue Growth: The report does not mention revenue growth.
Net Income: The report does not mention net income.
Profit Margins: The report does not mention profit margins.
Free Cash Flow (FCF): The report does not mention free cash flow.
Return on Equity (ROE): The report does not mention return on equity.

However, the report discusses particular options available for lululemon athletica inc (LULU), specifically focusing on a $390 put contract and a $400 call contract. The put contract offers a premium that could create an appealing cost basis for potential stock buyers.

The $390 put has a 57% chance of expiring worthless, indicating a reasonable interval of risk for the investor. If it does expire worthless, the premium earned represents a 4.73% return. This suggests that investors may consider leveraging this option for yield in a slightly bearish scenario. On the calls side, the $400 strike call provides a total return of 6.40%, appealing for those looking to sell their shares for profit or gain from premium income if the contract expires worthless.

The implied volatilities for both contracts are comparable, with the put at 43% and the call at 42%. Given that the actual trailing volatility is slightly lower at 40%, this might indicate that the expectations for price movements are reasonable. Overall, the information prompts investors to carefully analyze the options as strategic financial tools amidst the current trading price.

Stocks: LULU