Lyft Put Options Have High Premiums - Good for OTM Short Sellers as an Income Play

Lyft Inc. (LYFT) stock keeps rising, which has also elevated its put options. This has been a boon for short sellers of out-of-the-money puts, especially in nearby expiry periods. Lyft's forecast of positive FCF could be positive for Lyft put short sellers, especially for existing shareholders.

I discussed this strategy in two previous Barchart articles and those following this would have made money, especially long investors in LFYT stock. For example, I discussed short-put plays in the March 6, 2024, Barchart article, “Unusual Activity in Lyft Put Options Highlights Its Underlying Value,” and the Feb. 17 article, “Lyft Makes Positive Free Cash Flow and Expects This for 2024 - Could Lift LYFT Stock 25% Higher.”