Bears target Tractor Supply before results
David Russell | [email protected]
optionMONSTER's Depth Charge monitoring program detected the purchase of about 1,600 February 95 puts against open interest of just 170 contracts. Most of the large blocks priced for $3.80 to $4.20.
Those puts lock in the price where investors can sell shares in the farm-supply retailer. They can generate some nice leverage in the event of a selloff but will also lose value if it climbs or moves sideways. The trader could be taking a speculative short bet on the stock or may be looking to protect a long position. (See our Education section)
TSCO is off 1.38 percent to $93.43 in midday trading and has mostly fluctuated between $84 and $100 in the last year. The stock is sitting near its 200-day moving average. If it rolls over at the current level, it would mark a lower high and could make chart watchers expect a sharper selloff.
The last quarterly report in October was mixed, with profit above expectations but revenue weak. Same-store sales growth also slowly sharply from a year earlier.
Total option volume is almost 10 times greater than average today, with puts dominating the activity.