Options Trading News

August 15, 2013  Thu 9:14 AM CT

Big Lots is facing a bearish position ahead of its earnings report next week.

More than 2,500 September 32.50 puts have been bought so far this morning for $0.75 and $0.80, according to optionMONSTER's Depth Charge tracking system. The volume is already well above the strike's open interest of just 368 contracts before the session began, indicating that new positions were initiated.

The puts lock in the price where traders can sell stock in the discount retailer no matter how far it might fall. Traders use these options to hedge long positions or to make outright bearish bets. (See our Education section)

BIG is down 2.81 percent to $34.98 this morning, falling below its 100-day moving average. The stock bounced at the $31.50 level in late June and had been trading sideways near $36 for the last month.

The company is scheduled to report second-quarter results on Aug. 23.

Total option volume in BIG is already more than 15 times its full-session average for the last month. Overall puts outnumber calls by 26 to 1.
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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