Riding the Spread: Why Lyft Outpaces Uber in This Week’s Options Play

If you're considering a quick-fire bull put spread expiring this Friday, October 11, Lyft ($LYFT) presents an interesting opportunity. While Uber ($UBER) may be a stronger enterprise overall, Lyft’s recent market performance lends confidence that its stock will stay above the break-even price, offering a more attractive setup for this short-term options trade.

Lyft Bull Put Spread: A Safer Bet for Short-Term Traders

For the Lyft 12/11.5 bull put spread, the setup involves:

• Selling the 12 strike put

• Buying the 11.5 strike put

• Break-even price: $11.90

  
  

The break-even gap here is -4.34%, meaning the stock has more room to move downward while still allowing the trader to avoid a loss. Given that Lyft has not breached the break-even price in the past five days, the current price action suggests stability, despite the higher implied volatility and 60-month beta compared to Uber.

Uber’s Bull Put Spread: Higher Profit Potential but Increased Risk

For the Uber 74/71 bull put spread, the setup is similar:

• Selling the 74 strike put

• Buying the 71 strike put

• Break-even price: $73.39

  
  

The break-even gap here is narrower at -3.65%. While Uber’s stock offers more potential profit, it comes with increased risk, as the stock recently dipped below the break-even point during the past five days, making it a riskier option in the short term.

Lyft’s Wider Break-Even Gap Makes It a More Attractive Play

The main advantage Lyft provides in this situation is the wider margin to break even, which creates more room for error if the stock drops. On the other hand, Uber’s tighter margin, while potentially more profitable, exposes traders to more short-term volatility. Traders looking for a safer bet for this week’s expiration may prefer Lyft’s setup, given its better resilience in recent trading sessions.

Lyft’s Recent Stability Outweighs Uber’s Potential Profit

While Uber remains the stronger company by fundamentals, Lyft’s recent price performance and the wider gap to break-even make it the more compelling choice for a bull put spread expiring this Friday. The extra margin of safety could provide traders with the confidence needed to navigate the trade successfully, especially in a short time frame.

Disclaimer: The content provided in this article is for informational purposes only and should not be considered financial advice. Options trading carries significant risk and may not be suitable for all investors. Before engaging in any trading activity, investors should assess their risk tolerance and seek advice from a qualified financial advisor. The performance of any specific stock or trade strategy mentioned does not guarantee future results, and investors should conduct their own research before making any financial decisions.