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
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• 11:20 Executed
• Bot 3 CVNA March 18th $170 Puts @ $32.90