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Barchart
Barchart
Mark R. Hake, CFA

Spotify Stock Is Rising and Its Put Option Premiums are High - Worth Shorting for Income

SPOT Spotify AnaChart Barchart

Spotify Technology (SPOT) stock is rising ahead of expected earnings for Q3. Last quarter Spotify produced strong free cash flow (FCF)and analysts expect this to continue. This is also raising SPOT stock's put option premiums. That makes them worth shorting now for income and to set a lower buy-in price.

SPOT is at $386.08 in midday trading on Tuesday, Oct. 22. That is up significantly from its recent low of $322.77 on Sept. 6. However, it could still be worth a good deal more based on its strong free cash flow margins and analysts' higher revenue forecasts.

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