Lululemon Stock Gaps Lower on Margin Update

Higher costs and weaker consumer spending are weighing on LULU

Digital Content Manager
Jan 9, 2023 at 9:43 AM
facebook twitter linkedin

Lululemon Athletica Inc (NASDAQ:LULU) is down 10.1% at $295.89 at last check, after the apparel retailer noted it expects its fourth-quarter margins to decline, and tightened its quarterly earnings outlook amid higher costs and weaker consumer spending due to high inflation.

Today's bear gap has the shares trading at their lowest level since late October, while also breaching a floor at the $305 level, which had contained the security's December pullback. Longer term, Lululemon Athletica stock has shed more than 10% in the past 12 months.

The options pits lean bearish, per the equity's 50-day put/call volume ratio of 1.14 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 86th percentile of its annual range. This suggests long puts have been getting picked up at a much quicker-than-usual clip during the last 10 weeks.

Now could be a good opportunity to bet on LULU's next move with options, as the security is sporting attractively priced premiums at the moment. This per its Schaeffer's Volatility Index (SVI) of 46%, which sits in the relatively low 33rd percentile of readings from the past year.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners