On Holding (ONON) Might Be a UFO!
Today I decided to try jumping with my On moon boots while on the moon! I actually took this trade yesterday, but it fell a bit more since then, so I wanted to write about it today. But before I get to that...
What's the Word on the Street?
All indexes are solidly up this morning because of a basically in-line CPI (Consumer Price Index) release.
It was a confusing batch of numbers, with the consumer price index reading for August coming in hotter than expected on a monthly basis but in line with expectations on an annual basis.
The CPI reading showed an increase of 0.4% for the month, according to the Bureau of Labor Statistics, higher than the 0.3% that economists polled by Dow Jones were expecting. However, the index recorded 2.9% on a 12-month basis, as expected.
Additionally, so-called core CPI, which excludes volatile food and energy, increased 0.3% in August and 3.1% from a year ago. Both were in line with the Dow Jones forecasts.
The report comes a day after the producer price index showed an unexpected decline of 0.1% on the month. The PPI rose 2.6% on a 12-month basis.
Also on Thursday, weekly jobless claims saw a surprise jump. The figure for the week ended Sept. 6 increased 27,000 from the previous period to a seasonally adjusted 263,000. That's more than the 235,000 that was penciled in.
All of this data seems to point to the Federal Reserve being all but assured to cut interest rates next week (probably by .25%), which investors are taking as good 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?
Not much has changed since I last wrote about ONON. It raised its outlook on strong sales numbers a few weeks ago when it reported earnings. The stock has suffered recently because the company is based in Switzerland, which is currently subjected to one of the highest tariff rates (39%). I would expect at some point that the rate will be negotiated down and should boost the stock.
What's the Current Price?
In 2025, ONON has slid ~22%. Most of that was in the past 3 months with it falling ~25%. In the past month it's down ~12%, and on the week ~4%.
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 rating 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 $40 Put it says $1.08, it’s $1.43 for the equidistant Call at $45.
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 13.64, 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 $40 Put for the October 24th 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.
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.