LYFT Call Options Popular on Citron Research Nod

Citron outlined 5 reasons not to short LYFT shares

Apr 5, 2019 at 2:09 PM
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Ride-share concern and Wall Street freshman LYFT Inc (NASDAQ:LYFT) is in the spotlight again today, after Citron Research offered "5 reasons not to be short Lyft," arguing that "this is not a trendy video game" and ride-sharing is a "megatrend." Against this backdrop, LYFT stock is up 3.5% to trade at $74.51, set for its best session since going public last week. What's more, with LYFT options now trading, we take a look at how investors are speculating on the stock's short-term trajectory.

The stock got off to a rocky start. After going public on March 29, the equity peaked at $88.60 the same day, before settling at $78.29 -- near its debut-session lows. This week, meanwhile, LYFT fell to a record low of $66.10 on April 2 -- well below its $72 IPO price -- and was slapped with its first "sell" rating by analysts, to which Citron replied, "What??" However, the shares are on pace for a third straight gain today, and set to close back atop their aforementioned IPO price.

lyft stock chart april 5

As alluded to earlier, LYFT options began trading on Thursday, April 4. The security saw 31,000 calls change hands on the first day of Lyft options trading -- nearly twice the number of puts. Along with plenty of spread action at the May 80 call and put, the deep out-of-the-money May 100 call attracted the most attention, with nearly 3,500 contracts now in open interest. "Vanilla" buyers of these calls expect LYFT to surmount the century level by the time May options expire.

Today, calls are once again dominating the options pits. LYFT has seen roughly 48,000 calls change hands in today's session so far, more than twice the number of puts traded. The stock is seeing even more spread action -- this time at the May 85 call and put -- while it looks like short-term bulls are buying to open the April 80 call. By doing so, they expect LYFT to jump north of $80 by the close on Thursday, April 18, when front-month options expire.

 

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