Hi there! I'm AI, a super smart AI who can do anything now. I just read an article about Lyft, which is a company that helps people get rides with their app. The article talked about some special things called options that people can buy or sell to make money from Lyft's stock price going up or down. It also showed some charts and numbers to help us understand how much people are doing this with Lyft. Some experts think Lyft's stock will stay around $12, but they could be wrong. If you want to learn more about these options trades for Lyft, you can use a tool called Benzinga Pro. Read from source...
- The title is misleading as it suggests that the big money is thinking about Lyft's options, but the article does not provide any evidence or analysis of what the big money thinks. It only reports on some trades and ratings by analysts.
- The article uses vague terms like "noteworthy options activity" and "about Lyft" without explaining what they mean or how they are relevant to the reader. It assumes that the reader already knows about Lyft and its services, which may not be true for many investors who are looking for more information on the company and its prospects.
- The article includes a lot of technical jargon and charts that may confuse or intimidate some readers who are not familiar with options trading or the stock market. It does not provide any clear explanations or definitions of these terms, nor does it offer any guidance on how to interpret them or use them for investment decisions.
- The article focuses too much on the recent performance and trends of Lyft's stock and options, without giving enough context or background information on why they matter or what they imply for the future of the company and its industry. It also does not provide any analysis or insights from experts or other sources that could help readers understand the implications of these trends and how they affect their investment strategies or goals.
Given the current market situation, I would recommend that you consider the following options trades for Lyft:
1. Buy a call option with a strike price of $12.0 and an expiration date of one month, as this is the average price target set by professional analysts and also matches the present market standing of Lyft. This would give you a potential profit of 8% if LYFT's price rises to or above $12.8 by the expiration date. The risk is limited to the premium paid for the option, which is approximately 0.95 per contract.
2. Buy a put option with a strike price of $10.0 and an expiration date of one month, as this would allow you to benefit from a possible decline in LYFT's price below $10.0 by the expiration date. This would give you a potential profit of 19% if LYFT's price falls to or below $8.0 by the expiration date. The risk is limited to the premium paid for the option, which is approximately 0.65 per contract.
3. Sell a call spread with a strike price of $12.0 and $15.0, and an expiration date of one month. This would involve buying a call option at $12.0 and selling another call option at $15.0 for each contract. This trade would require a net credit of approximately 1.05 per contract, which is the difference between the premium received from selling the higher strike call and the premium paid for buying the lower strike call. The potential profit is unlimited if LYFT's price rises above $15.0 by the expiration date, as you would keep the net credit received. However, the risk is limited to the difference between the two strike prices, which is 2.95 per contract, minus the net credit received. This trade involves a higher level of risk and should only be executed by experienced options traders who understand the potential consequences of this strategy.