Buying CVNA put contracts.
Carvana Co. (CVNA) is one of the money-losing internet stocks that is in the process of falling from grace.
The company has a $12.5 billion valuation while investors expect the losses of $1.00 per share this year and only a 77-cent profit in 2023. So at it’s current price near $147, CVNA is trading near 190 times 2023 expected profits.
That leaves plenty of room for the stock to continue trading lower.
Momentum is decidedly negative and a recent rebound from oversold levels gives us a good entry point for a new bearish position.
Buying March $170 put contracts gives us time for the trade to evolve. We’ll also get the benefit of close to a $1 for $1 option price movement if the stock drops, while muting potential risk through added time value if the stock rises.
- Buy (to open) 3 CVNA March 18th $170 Puts
- Limit $35.00 or less
- The new position will represent roughly 8.4% of our Spec Model capital
- 11:20 Executed
- Bot 3 CVNA March 18th $170 Puts @ $32.90