LULU LEMON IS LEAVING NASDAQ GET READY Seagate Technology Holdings PLCBATS:STXStewnomicsOptions Analysis: NASDAQ 100 Index ReconstitutionYour thought process on seeking out options opportunities based on the Nasdaq-100 Index (NDX) reconstitution is a sound strategy, as index rebalances often create temporary, forced buying and selling pressure that can move stock prices.Lululemon (1LULU$) is being removed from the NDX (the index that the popular 2QQQ$ ETF tracks) as part of the annual rebalancing, which is effective prior to the market open on Monday, December 22, 2025.3LULU$ is being removed along with five other stocks (Biogen, CDW, GlobalFoundries, ON Semiconductor, and The Trade Desk), and six new companies are being added.4 This reconstitution event is a major catalyst.Companies Joining the Nasdaq-100 IndexThe six companies being added to the NDX are the primary focus for potential Call options, as index-tracking funds (5QQQ$) will be forced to buy shares of these companies to align their portfolios before the effective date (December 22nd).6 This demand pressure can push the stock price higher leading up to the change.The six additions are:Alnylam Pharmaceuticals, Inc.7 (ALNY$) - A biopharmaceutical company focused on RNA interference therapeutics.Ferrovial SE (8FER$) - A Spanish multinational construction and infrastructure company.9Insmed Incorporated (10INSM$) - A biopharmaceutical company targeting rare diseases.11Monolithic Power Systems, Inc. (12MPWR$) - A high-performance analog and mixed-signal semiconductor company.13Seagate Technology Holdings plc (14STX$) - A data storage company, benefiting from the recent AI/data boom.15Western Digital Corp. (16WDC$) - A data storage company, also a significant beneficiary of the AI/data boom.17Two Potential Call Candidates: Storage StocksBased on recent market trends and the forced buying effect, the two data storage companies, Seagate (STX$) and Western Digital (WDC$), are compelling candidates for a Call option strategy.Rationale: Both companies are riding the significant tailwind of the Artificial Intelligence (AI) and data center boom, which drives massive demand for high-capacity storage.18 Their inclusion in the NDX adds a strong technical catalyst (forced buying) to an already favorable fundamental narrative.Strategy: Consider Near-Term Call Options with an expiration date shortly after the December 22nd effective date (e.g., contracts expiring in late December or early January). The goal is to capture the price appreciation driven by institutional buying.Risk: Any sudden market correction or negative news specific to the sector could temper the index-driven rally.Companies Exiting the Nasdaq-100 IndexCompanies being removed from the NDX are the focus for potential Put options, as index-tracking funds will be forced to sell their shares of these companies before the effective date.The Lululemon (LULU$) Put ThesisWhile 19LULU$ is being removed, the price action is complex due to a recent change in CEO leadership, which the market often views as a potential positive catalyst for a turnaround.20Bearish Technical Catalyst (Put): Index funds must liquidate their holdings of LULU$. This forced selling should apply significant downward pressure on the stock price in the short term leading up to December 22nd.Bullish Fundamental Counter-Catalyst: The recent announcement of the CEO's departure was met with an initial rally, suggesting long-term investors are optimistic about a strategic reset.21Strategy: A Put option strategy must focus purely on the immediate, short-term selling pressure from index rebalancing.Near-Term Put Options with an expiration around the Dec 22nd transition date (or slightly after) would be appropriate.Risk: The long-term bullish sentiment around the new leadership could overwhelm the short-term index-related selling pressure, leading to the Put expiring worthless.⚠️ Critical Disclaimer: Options and Index ReconstitutionAs always, do your own research. Trading options based on index rebalancing is a speculative strategy. The market often front-runs (or prices in) the index changes well before the official date. While index buying/selling is a known catalyst, market volatility can quickly negate the technical impact of a rebalance.The video below discusses how the Nasdaq 100 reconstitution can create trading opportunities.You can learn more about how index fund rebalancing affects stock prices by watching Index Rebalancing: What Happens to Stock Prices?.