A Bet Against Lyft to Septuple Money

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My account has traded securities in such a way that it will make money if the share price of Lyft (LYFT) declines over time. The dollar amount spent is low and the payoff could potentially be high. On multiple occasions in the past, I have described trades and given detail about their rationale. Implicit predictions have proven accurate on an overwhelming majority of occasions.

Toiling over detailed commentary in order to give it away for nothing is not enticing. Suspect or erroneous reasons to make predictions can be popular. Those won’t be peddled here either.

It could be helpful to know that Lyft lacks the global presence of its competitor Uber (UBER).

Another detail is that the particular trade would make its maximum profit of $437, before commissions, fees and taxes, if the share price of LYFT is $40.01 on January 17, 2020 (It closed at $47.79 on September 16, 2019). That would be in exchange for risking $62, also before commissions. The scenario is unlikely.

If the share price moves higher during the interim, which seems probable, the same trade may be replicated at a lower price. (Alternatively, if the stock’s price remains in a narrow range and then descends below $45 after a month or two, there should be a substantial profit; though it would be far short of $437). If the stock has moved higher so that the trade can be replicated at a lower cost, one of them maybe would potentially be cashed in, approximately during November, and the other perhaps left to make money over time as January approaches.

10/1/19

The share price has been declining fast so the above trade is now closed out at a very modest profit. However, there are other securities arranged in my account so that there will be further profit if LYFT continues its decline or stays in a range. Once again, if bounces higher there is a likelihood of adding to the position in some way or another.

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