This LULU Iron Condor Could Turn 52% Profit in 15 Days
Outlook is neutral, with stock confined to a band of ±5%
Strategy has +52% ROI potential and 20% overvalued
Expiration | 27-Sep-24 |
Buy | 225 Put |
Sell | 240 Put |
Sell | 265 Call |
Buy | 280 Call |
Credit: | $5.10 |
Option Profit Calculator for LULU Iron Condor at 27-Sep-24 Expiration
If LULU stock price at expiration is between $240.00 and $265.00, this spread has a 52% upside potential
As you can see in the chart above, the most profitable outcome is for LULU stock price to close between $240.00 and $265.00 at the September 27, 2024 expiration. Within that price range, all of the options will expire worthless, and you'd keep the original $5.10 credit you received at the time of the trade.
The maximum gain will be realized if the stock price is between $240.00 and $265.00. The maximum gain is $5.10
The maximum loss would occur if the stock price at expiration is below $225.00 or above $280.00. The maximum loss is $9.90
LULU Spread Current Market Price vs. Historical Average
LULU Iron Condor is trading at a 20% premium to historical average.
Using historical data to measure how a similar spread in LULU was priced in the market, the 4-year average value was 4.27, with a high mark of 6.80 and a low of 2.31.
Currently, this iron condor is bid at 5.10 and offered at 6.63. The midpoint of the spread is 5.87.
If we use 4.27 as our historical fair value benchmark, the current market bid price is at a 20% premium, while the current market midpoint represents a 38% premium.
Current Price | Historical Values of Similar Iron Condors | ||||
Bid | Ask | Midpoint | Average | High | Low |
5.10 | 6.63 | 5.87 | 4.27 | 6.80 | 2.31 |
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