The big news story on Wednesday was the 17% drop in Advanced Micro Devices’ (AMD) share price after CEO Lisa Siu provided weak guidance for Q1 2026.
While the company expects revenue of $9.8 billion in the first quarter, $420 million above the Wall Street average estimate, some felt the topline should have been much more robust given AMD's AI-related spending to date.
Water under the bridge, Su remains very optimistic about the future due to these same AI investments. Investors will undoubtedly continue to make bullish and bearish bets on AMD throughout 2026.
In yesterday’s unusual options activity, there were 1,234 calls and puts with volumes of at least 500, expiring in seven days or more.
The top 25 Vol/OI ratios ranged from Strategy’s (MSTR) Feb. 13 $142 put at 140.22 to Uber Technologies’ (UBER) April 17 $65 put at 32.88.
Uber just happens to be one of the three popular stocks in the top 25 that set up for both long and short strangles. The other two are Boston Scientific (BSX) and Peloton Interactive (PTON).
Taking into account yesterday’s data, here are some of my thoughts on the possible plays to make among the three stocks, taking into account what’s changed since then that could alter one’s approach.
Peloton Interactive (PTON)
Peloton’s March 20 $8 call had the 14th-highest Vol/OI ratio yesterday at 46.17. The volume of 6,510 was about 10% of the total, its fourth highest in the past three months.
Based on the $8 call, these are the long (first) and short (second) strangles I’ve focused on.
I’ve never been bullish about Peloton. Regardless of what bells and whistles you attach to its bikes and treadmills -- AI being the prime one -- it’s still a hardware business that will constantly face profitability issues and difficulty sustaining revenue growth. That’s a lethal combination.
This morning, before the markets opened, it reported Q2 2026 results that missed the mark. It dropped its fiscal 2026 (June year-end) revenue guidance by 3% from Q1 2026, to $2.42 billion at the midpoint, with $475 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
The adjusted EBITDA margin for 2026 is projected to be 19.6%, 340 basis points higher than in 2025. Despite the 11% workforce cut last week, I don’t see Peloton meeting its guidance.
As a result of its soft guidance -- despite launching new products last fall -- shares are down 23% as I write this in late morning trading.
That alters my thoughts on the strangle to play.
For starters, the March 20 $5 put is now ITM (in-the-money). Here’s the action for the $8 call and $5 put with a long strangle in mind.
So, the net debit goes from $0.50 ($50) to $0.86 ($86), which changes the upper breakeven to $8.86 from $8.50 and the lower breakeven to $4.14 from $4.50. That increases the spread between the two breakevens from $4 to $4.72. That reduces the likelihood of the long strangle breaking even from 26.7% to below 20%.
Here’s the $8 call and the $5 put as they relate to a short strangle.
The net credit would be $0.68. The upper breakeven is $8.68, while the lower breakeven is $4.32. Of course, because the short strangle is a bet that the share price at expiration will be between $8.68 and $4.32, the increased volatility from its earnings report means that’s very unlikely.
Your best move here would be to go for a lower strike price that’s OTM (out-of-the-money) for both the call and put.
Boston Scientific (BSX)
Boston Scientific’s April 17 $90 call had the 18th-highest Vol/OI ratio yesterday at 37.82. The volume of 15,960 was about 17% of the total, the second highest in the past three months. The action on the $90 call was spread relatively evenly between institutional and retail investors -- there was only one trade of 1,000 or more.
Based on the $90 call and the $75 put with a 13.46 Vol/OI ratio, these are the long (first one) and short (second one) strangles I’ve focused on.
The expected move, up or down, for the April 17 expiration is $7.99, or 10.35%, based on today’s share price of $77.43, which is up 2.5% as I write this.
Like Peloton, Boston Scientific reported quarterly earnings yesterday before the markets opened. Investors didn’t like that the company’s Q4 2025 revenues from its electrophysiology and Watchman products within its cardiovascular portfolio didn’t achieve sequential growth from the third quarter.
I don’t spend much time in the healthcare space. Still, I don’t think there’s any question Boston Scientific is a good company -- it expects revenues to grow by 11% in 2026 at the midpoint of its guidance with earnings per share of $3.46, 13% higher than in 2025 -- from where I sit, the 18% haircut was a complete overreaction.
Of the 31 analysts covering its stock, 29 rate it a Buy (4.77 out of 5), with a target price of $125.13, well above its current price.
Directionally, the overreaction suggests its stock is unlikely to fall much further over the next 72 days. However, I’m not sure it can get to the $95.20 breakeven on the long strangle. Therefore, you’re better off pocketing the $440 net credit with the short strangle.
Uber Technologies (UBER)
As I mentioned in the introduction, Uber’s April 17 $65 put had the 25th-highest Vol/OI ratio yesterday at 32.88. The volume of 8,157 was about 3% of the total, its fifth highest in the past three months.
If you’ve owned UBER stock the past five years, it’s been a major disappointment, up just 32%, less than half the S&P 500. Yet, in that time, its revenues have increased by nearly fivefold, while it has gone from an EBITDA loss of $3.93 billion to an EBITDA profit of $6.31 billion, with a 12.1% margin.
UBER shares lost 5% yesterday after its Q1 2026 earnings-per-share guidance of $0.69 was 12 cents below Wall Street’s estimate. CEO Dara Khosrowshahi is very optimistic about the company’s future.
"We enter 2026 with a rapidly growing topline, significant cash flow and a clear path to becoming the largest facilitator of AV (autonomous vehicle) trips in the world," Khosrowshahi said in its Q4 2025 press release.
At some point, investors are sure to see the light. Uber’s cash flow is growing exponentially, yet its share price remains stuck in neutral. That’s likely to change in 2026 and beyond.
With an expected move of $8.37 (11.05%), I see the short strangle (second of the two) as the better bet for now. That’s because it will take another quarter or two for investors to realize Khosrowshahi is being conservative with Uber’s guidance. Then you’ll see bigger expected moves as we enter 2027. At that point, long strangles should be the play.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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