LYFT options are affordably priced at the moment
The shares of Lyft Inc (NASDAQ:LYFT) are down 1.7% at $29.27 today, after the ride-sharing staple won an emergency stay ruling from a California appeals court. The ruling extended the time required for ride-sharing apps such as Lyft and rival Uber Technologies (UBER) to classify their drivers as employees rather than contractors. Lyft planned to cease its services in the state if they failed to lock down an emergency stay regarding their filing in the appeals court.
Lyft stock dipped to a three-month low of $25.74 yesterday while the court decision was still in progress. Back in early June, the round $40 level turned away a rally, with LYFT trading sideways between the $32 and $26.50 area over the last two summer months. Year-to-date, the equity has shaved off 31.7%, and is facing stiff pressure from its 40-day moving average.
Puts have been growing in popularity. Lyft stock's 10-day put/call volume ratio of 0.99 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), sits in the 75th percentile of readings from the past year. So while calls still just barely outnumber puts on an absolute basis, the high ratio indicates the rate of put buying relative to call buying has been accelerated.
Regardless of direction, LYFT also sports a Schaeffer’s Volatility Index (SVI) of 62%, which sits in the 15th percentile of its annual range. This suggests options have been pricing in relatively low volatility expectations right now -- a boon for premium buyers.