On Friday’s Options Action, the crew analyzed the performance of Lululemon stock. LULU posted strong growth in the digital space and continues to grow in China during a slowing economy. Coupled with improving operating margins provides an opportunity for expansion. Expecting LULU to trade higher on earnings, Michael Khouw suggests buying an April 135/145/155 Risk Reversal Call Spread a $0.20 Debit. As of Friday’s close, these options were trading at a $1.45 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: LULU Options Action Video