Options Trading News

Someone apparently thinks that Supervalu is not quite living up to its name.

optionMONSTER's Depth Charge monitoring system detected the purchase of 10,000 October 3 puts for $0.20 and the sale of equal number of July 4 puts for $0.15. Volume was below open interest in the July contracts but not in the October options, indicating that an existing position was rolled from one strike to the other.

The trade cost $0.05 and gives the investor an additional three months of downside exposure in the stock. Shares of the grocery company have lost more than 40 percent of its value so far this year.

SVU rose 2.95 percent to $4.53 yesterday and is near its lowest price since at least 1985. Buried under a mountain of debt from an ill-conceived expansion in 2006, the company has repeatedly suffered from weak sales as shoppers migrate to dollar stores and boutique supermarkets. Its book value this February was less than 1 percent of its level just two years earlier.

Overall option volume in SVU was more than quadruple its daily average yesterday, according to the Depth Charge. Puts outnumbered calls by 25 to 1.