I noticed something interesting on the Peloton ($PTON) options chain, and I’m curious how you all might take advantage of this situation.
Using the Options Overlay on TradingView, I observed that the 20-delta OTM call is significantly above the binary expected move (or implied move), while the 20-delta put is nearly aligned with the expected move. On the chart, the yellow line represents the expected move, and the blue line shows the 20-delta range.
It's clear that the call options are much more expensive than the put options at the same distance, but I'm struggling to figure out the best way to capitalize on this.
How would you trade this? Any suggestions on how to make the most of this setup? I’d love to hear if you see any viable strategies, as the underlying seems too cheap to easily craft a profitable approach.
https://i.redd.it/jqzm3kpn9pjd1.png
Posted by TanukiTrade
2 Comments
I would just read it as demand and expectations that the price will go up. I’m not sure if this is accurate so someone can tell whether this logic is false. But essentially premiums are higher because id guess volume is higher on those calls, the volitility is higher, and there is a market expectation that PTON will have positive earnings.
what’s your thesis? what do you expect to happen because this relationship you noticed?