FuboTV's Hidden Weakness: Why a Bear Put Spread Could Be Your Smartest Move Yet

By Josh Enomoto

For investors who thrive on speculation, FuboTV (FUBO) might seem like an enticing play. As a small-cap — $1.34 billion — streaming enterprise, the company has been no stranger to volatility, with a current beta of 1.77. 

At times, FUBO stock’s bullish streaks have been undeniable, such as in its meme stock heyday when it briefly soared into the stratosphere. More recently, FUBO stock staged an impressive rally on news of a Disney (DIS) deal, further fueling investor enthusiasm.

However, for those looking beyond the headlines, data tells a much different story. Even after occasional rallies negative statistical biases continue to cast a shadow over the stock’s future trajectory. More importantly, Fubo’s historical price action following downturns suggests that additional losses could be ahead.

Given these factors, a bear put spread targeting the $3.50 strike price could be an attractive setup — one that aligns both with the stock’s recent performance and its broader market tendencies.

Statistical Bias Suggests More FUBO Stock Downside Ahead

One of the easiest traps traders fall into is assuming that a stock will bounce just because it has suffered a loss. While that’s sometimes the case, history shows that FUBO stock tends to keep struggling even after suffering modest pullbacks. That’s where the distinction between stochastic and dynamic probabilities becomes critical.

• Stochastic probabilities look purely at historical price changes over a fixed period — one week, two weeks, four weeks, etc. This method reveals the raw likelihood of the stock rising or falling over specific timeframes.

• Dynamic probabilities, on the other hand, account for how the stock tends to behave following specific conditions — such as a one-week loss of up to 5%.

So what do the numbers say? Not great things for bulls.

• Over the past five years, FUBO stock has had a 51.1% chance of rising the week after a modest decline.

• However, those odds deteriorate significantly over time. By four weeks out, the probability of a positive move drops to just 37.78%.

• Even more concerning: When FUBO stock loses between 0%-5% in a single week, dynamic modeling suggests that it tends to keep dropping rather than recovering.

Bottom line? Investors banking on a rebound might be disappointed.

The Bear Put Spread: Risk-Managed Bearish Exposure

Given the above, traders might be best served by an options strategy that capitalizes on Fubo’s historical weakness while keeping risk in check. Enter the bear put spread, a limited-risk, limited-reward strategy that profits from a stock decline.

Specifically, the trade in focus involves:

• Buying the $4 put while at the same time…

• Selling the $3.50 put

• Expiration: March 7, 2025

At the time of writing, this spread costs $27 per contract, representing the total maximum risk. If FUBO drops to $3.50 or lower, the spread achieves its maximum profit potential, generating a $23 net gain per contract.

• Maximum risk: $27 (the premium paid)

• Maximum reward: $23 (difference in strikes minus premium paid)

• Breakeven price: $3.73 (strike price of long put minus cost of spread)

• Risk-reward ratio: 1.17:1

While this isn’t a wildly asymmetric bet, the probability-driven thesis strengthens the case for a controlled bearish wager.

Why the $3.50 Strike Makes Sense

Some might ask: Why choose $3.50 as the target strike? Simple — because probabilities suggest it could be hit.

Using a dynamic modeling approach, FuboTV stock has a projected four-week downside target of $3.53. This forecast aligns closely with the short strike of the bear put spread, making it a realistic target rather than a shot in the dark. The setup thus allows traders to capitalize on an expected move while avoiding excessive risk.

Additional Risks and Considerations

No trade is without its risks. While the statistical evidence favors a bearish move, broader market sentiment and external catalysts could unexpectedly push FUBO higher. Factors such as improved earnings, a major new partnership, or a shift in macroeconomic conditions could disrupt the anticipated trajectory.

Moreover, options traders must consider the effects of implied volatility (IV). A sudden surge in IV could impact the pricing of the bear put spread, potentially making the trade less attractive. Conversely, if IV contracts significantly, the strategy could become even more appealing from a cost basis.

Final Thoughts: A Calculated Bearish Bet

While it’s always tempting to bet on the underdog, FUBO stock has been fighting an uphill battle for years. Despite occasional upside bursts, its overall statistical tendencies favor further downside rather than sustained rallies. This means that traders looking for the best possible trade should consider probabilities rather than emotions.

The March 7, 2025, $4/$3.50 bear put spread provides a controlled-risk way to profit from FUBO’s likely move lower. At $27 risked per contract for a potential $23 reward, the strategy isn’t just based on speculation—it’s rooted in data-driven decision-making.

For those willing to follow the numbers, this could be an opportunity worth considering.