Lululemon (LULU) stock is stabilizing around $160 after recent selling. The company’s PE ratio is at a low of 11.20, making it an attractive option for traders. A bull put spread trade for LULU offers potential profit with limited risk. Implied volatility is high at 65.15%, providing good opportunities for options trading.

The bull put spread involves selling an out-of-the-money put and buying a put further out-of-the-money. In this case, selling the March 20 put at $130 and buying the $125 put creates the spread. The trade offers a 21.95% return on risk if LULU stays above $130 by March 20. A stop loss can be set at the premium received ($90) or at a key support level like $160.

Investors should be cautious as options trading carries inherent risks, and losses can be significant. This article serves as an educational piece and not a specific trade recommendation. Conduct thorough research and consult a financial advisor before making investment decisions.

Read more at Barchart: Optimistic on LULU? This Bull Put Spread May Fit Perfectly