Short Term Long Straddles LYFT

2019年8月25日

I’m of the belief that the business model for Uber and Lyft long term is on with very thin margins and is a commoditized product. Eventually these two companies will stop marketing themselves as unique businesses and improve margins. However, as Ivan Feinseth of Tigress pointed out, as economy gets worse more riders could become drivers; therefore eroding demand and increasing supply. Lastly, the idea that “autonomous” vehicles will solve their margin is pure fantasy unless you believe Uber and Lyft aren’t comodotized. I can explain more on that later.

With that I opened a long straddle on LYFT AT 49 with 8.31.19 x date. I believe much of of the selling was due to the following:
1. Locked in owners selling Friday after the anticipated after lock down bounce was so short lived. Especially when one looks at UBER trading about 10% below their previous “holding low” while Lyft just broke their previous low Friday. If downward trend continues you could very easily see Lyft @ $40 within 2 weeks.
On the flip side, if Lyft stabaluzes for the short term one could see a rise to above Friday open by mid week. Either way the Straddle, while not killing it should return a handsome ROI by Thursday

2019年8月26日

交易开始

Opened Straddle 51 AUG 30 5 CALL @ $1.09/50 AUG 30 PUT @ 1.14

Will most likely close CALL EOD today or first thing TUES as believe LYFT & UBER way over valued and with LYFT getting bounce from Upgrade. That will wear off by tomorrow

2019年8月26日

注释

Read where Guggenheim analyst predicted price increase wouldn’t hurt demand. Maybe not on his salary but even if just going 5 miles I see which is cheaper Uber or Lyft. I pick the cheaper. This is a commodity business. Don’t treat it like anything else. LYFT and UBER are tech companies like I’m John Wick

2019年8月26日

注释

Only exception is when demand is very high than I’ll take what is closest. But for several reasons supply will slowly outstrip demand and this will be less of an issue