Options Trader: GoPro May Catch A Bid If Markets Hold

Nic Chahine was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

• Shares of GoPro Inc (NASDAQ: GPRO) have declined 43 percent in the past month.
• Create Income With Options Spreads Author Nic Chahine said he just bought October 23 $40 calls to participate in market upside.
• Chahine said he did not buy GoPro based on conviction, but rather with money he is willing to walk away from should the gamble not work out.

Options trader Nic Chahine said that he used some of his "lotto money" to buy GoPro $40 calls with the expectation that if the market doesn't "fall apart," GoPro may outperform. His call rang true on Tuesday, when major market indexes gained less than 1.5 percent, while GoPro increased 2.1 percent.

Chahine said he chose the short-dated strike price because he believes the trade is either going to move higher or "it's going to be at the IPO price" – in the mid-$20s. He suggested that the stock could be at another extreme at present, just as it was when it hit a high above $90 earlier this year.

Chahine also justified his position by noting that he is mostly bearish the market in his other positions. If those positions don't work out, being long GoPro would be a moderate hedge, giving Chahine some exposure and positive deltas.

"This will get me participating on the upside," he said.