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Tony Zhang Presents Peloton Trade Strategy To Ride Out Vaccine News

On CNBC’s “Options Action,” Tony Zhang suggested a bullish options trade in Peloton Interactive Inc (NASDAQ: PTON). He likes the stock because it recently bounced back from its support, just below $100. He is also encouraged by a significant increase in the monthly number of workouts per user. He thinks the company is more than a spin bike company; he sees it as an all-round digital fitness platform.

Zhang believes news about a COVID-19 vaccine could cause small short-term hits to the share price so he wants to sell puts to make a bullish bet. Specifically, he wants to sell the December $110/$100 put spread for a total credit of $4.40. The trade breaks even at $105.60, or 4.78% below the closing price on Friday. It can maximally lose $5.60.

© 2020 Benzinga does not provide investment advice. All rights reserved.

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