BY HANS ALBRECHT
June 5th, 2025
Hey Traders,
Andrew here – it’s time for our weekly “1 stock I love, 1 stock I hate” analysis.
Ahead of our Ticker Highlight Show every Monday at 10 a.m. ET, the Option Pit trading team gathers their favorite and least favorite stocks of the week.
Then during our live show, Mark Sebastian uses his cheap options scanner to find an easy, directional options trade for one of these stocks – and we give it away for FREE.
On Monday, we entered a trade in Ouster, Inc. (Ticker: OUST), and by Wednesday, we closed it for a solid 50% gain. OUST, a company specializing in industrial sensor technology, was a chart pick from Licia featuring attractively priced options. You can view the trade in our THS Portfolio here.
Don’t miss out on next week’s trade!
Anyway, here are my picks….
My Worst Pick:
LULU Lemon Athletica Inc (Ticker: LULU)
It feels a bit like kicking the stock while it’s down, but LULU delivered a major earnings disappointment. Traders typically react poorly to weak guidance, and for a company once seen as a high-flying growth name, this performance raises serious concerns.
LULU is trading uncomfortably close to its 52-week lows, and at this point, a retest seems likely. That level could present a logical spot to cover the short position.
12 month LULU chart with 90 day IV/HVs
I’m targeting the low $240s range as a potential area to cover the position.
My Best Pick:
Peloton Inc (Ticker PTON):
The stock that I think has room to rally is PTON:
1 year chart with 1 day candles on the top chart, 90 day HV/IVs on the bottom chart
Lately, we’ve seen a notable spike in unusual options activity in PTON. Call buyers are clearly betting on a turnaround, and traders have driven up option volatility—as shown by the rising green line in the 90-day implied volatility chart above. I like this setup as a risk reversal: selling puts and buying upside calls. Based on current metrics, I estimate PTON is valued around $800 per paying subscriber, and that user base remains highly loyal. It seems that most of the post-COVID growth challenges that derailed the company are now largely behind it.
I’ve been holding some July calls, but now that the CEO has signaled a commitment to turning the company around, I’m shifting to a longer-term setup.
Be sure to join us Monday at 10 AM ET to see if my picks turn into a free trade opportunity!
Add the Ticker Highlight Show to your calendar here.
To your Trading Success,
AG
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