Uber (UBER) Might Be a UFO!

Your Uber has arrived. Come on and get in, we've got UFOs to trade! But first…

What's the Word on the Street?

The market is down today as investors await the Fed decision tomorrow and more data like the July jobs report on Friday. Data released today shows consumer confidence increased while job openings decreased.

As for trade deals, investors had a muted reaction to the EU trade deal that was struck on Sunday and are underwhelmed with a probable 90 day extension with China.

The Federal Reserve is not expected to cut interest rates tomorrow, but Chairman Powell will have a press conference after the announcement. His comments may influence the market's expectations going forward, as we get more clarity on what the Fed is thinking regarding inflation and labor data, tariffs, and how that will affect future rate decisions.

Uber (UBER)

What Is It?

Uber Technologies, Inc. is a technology platform, which engages in the development and operation of technology applications, networks, and product to power movement from point A to point B. The firm offers ride services and merchants delivery service providers for meal preparation, grocery, and other delivery services. It operates through the following segments: Mobility, Delivery, and Freight. The Mobility segment refers to products that connect consumers with Mobility Drivers who provide rides in a variety of vehicles, such as cars, auto rickshaws, motorbikes, minibuses, or taxis. The Delivery segment offers consumers the chance to search for and discover local restaurants, order a meal, and either pick-up at the restaurant or have the meal delivered. The Freight segment focuses on connecting Carriers with Shippers on its platform, and gives Carriers upfront, transparent pricing, and the ability to book a shipment. The company was founded by Oscar Salazar Gaitan, Travis Kalanick, and Garrett Camp in 2009 and is headquartered in San Francisco, CA. The listed name for UBER is Uber Technologies, Inc.

Why Is It a Possible UFO?

Primarily its current share price relative to its fair value, what other option traders expect, and its volatility are the reasons UBER could be a UFO.

What About Recent News?

Autonomous vehicles are starting to spread to more cities, and while Uber and Waymo currently have a partnership, that may be getting ready to end.

Uber announced a partnership earlier this month with Lucid, and yesterday Waymo announced a partnership with Avis Budget Group to expand into Dallas. The latter news sent Uber’s stock lower as increased competition would challenge Uber’s share of the autonomous driving market.

Despite the potential hazy horizon, Uber still has a lot going for it, and I think there’s an opportunity for a trade.

What's the Current Price?

UBER has had an impressive run so far this year, but it’s down on the month by ~6%, the week by ~4%, and on the day by ~4%. I like to take advantage of pullbacks that I think are overreactions by investors.

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 UBER’s most recent earnings report on 05/07/2025, it has received 28 ratings and taking the average, the fair value might be somewhere around: $103.68.

26 ratings are a Buy, 1 is a Hold, and the Morningstar rating is unknown. The lowest price target is $84, while the highest is $120.

What Do Options Traders Think?

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 $82 Put it says $2.22, it’s $2.73 for the equidistant Call at $91.

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 UBER (stock price in blue) is currently hovering around 37, which is fairly elevated (IV rank goes from 0-100). This makes short strategies (which are what I prefer) more 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.

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. 

UBER does not offer a dividend. But that’s not a dealbreaker!

So if you saw the most recent image above, I already STO (sold to open) 1 contract of the $82 Put for the September 5th 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?

1. 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.
2. 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 UBER (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.