On Holding (ONON) Might Be a UFO!
I'm glad I ordered these special On moon boots before the tariffs on Switzerland went to 39%! It could be a UFO, but before that...
What's the Word on the Street?
The PPI (Producer Price Index) report released this morning and was hotter than expected.
The producer price index jumped 0.9% last month after no change in June, the government said Thursday.
The rate of wholesale inflation climbed to 3.3% from 2.3%, a five-month high.
Another gauge known as the core rate that is seen as a more stable measure of wholesale inflation rose 0.6% in July.
The 12-month increase in the core rate moved up to 2.8% from 2.5%.
This was a bit of a surprise and possibly shows that the tariffs implemented earlier in the year are starting to show up in economic data. PPI specifically measures inflation that producers deal with, which could eventually hit consumers. All of this means that the chance of the Federal Reserve cutting interest rates in September is less likely than it was yesterday. As you'd expect, the market is down on the news.
On Holding (ONON)
What Is It?
On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, all-day activities, and tennis. It sells its products worldwide through independent retailers and global distributors, its own online presence, and its own stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti in January 2010 and is headquartered in Zurich, Switzerland. The listed name for ONON is On Holding AG.
Why Is It a Possible UFO?
Primarily its current share price relative to its fair value and what other option traders expect are the reasons ONON could be a UFO.
What About Recent News?
ONON released its earnings 2 days ago and reported good results, raising full year guidance based on the strength of its direct-to-consumer channel. However, the stock has taken a beating because it's based in Zurich. And right now, Switzerland is facing one of the highest tariff rates currently (39%).
Swiss officials were unable to reach a deal with the US Administration in time before the tariff deadline, but they are reportedly scrambling to make one ASAP.
What's the Current Price?
ONON has had a rough year so far. Down ~22% in the past 3 months, ~15% in the past month, and now ~7% on the day. That big drop makes it an enticing time to trade what could be a possible UFO.
What’s the Fair Value?
I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…
Since ONON's most recent earnings report on 08/12/2025, it has received 3 ratings and taking the average, the fair value might be somewhere around: $62.67.
2 ratings are a Buy and 1 is a Sell. The lowest price target is $40, while the highest is $79.
What Do Options Traders Expect?
Calls are trading over equidistant Puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $42 Put it says $1.08, it’s $1.46 for the equidistant Call at $47.
The premium (the credit you receive for executing the trade) is currently less for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go up, rather than down.
How About Volatility?
The IV rank (the purple line) for ONON (stock price in blue) is currently hovering around 10.47, which is pretty low (IV rank goes from 0-100). This makes short strategies (which are what I prefer) less attractive.
What's the Trade?
My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value.
Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.
ONON does not offer a dividend, but that’s not a dealbreaker!
It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral.
So if you saw the most recent image above, I already STO (sold to open) 2 contracts of the $42 Put for the September 26th expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.
When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.
What About Alternative Trade Ideas?
- If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
- Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.
Wait…Where Are the Candlesticks? And All the Other Indicators?
I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing.
As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.
Completed Trades
Dino Silvestro
50% profit
Alternate Doodles
I considered Swiss-ing it up a bit more, and decided it was too much
Disclosures
- I currently have an open trade with ONON (as mentioned in this post).
- No trade is a sure thing. There is always risk involved.
- This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.