OptionsHouse

Options Trading News

November 29, 2013  Fri 11:50 AM CT

JCP: SEE CHART GET CHAIN FIND STRATEGIES
J.C. Penney has seen its share price cut in half this year, but one trader is hoping for a quick pop.

Dominating today's JCP option volume is one transaction in the December Weekly contracts that expire next Friday. A trader sold 10,000 of the 9.50 calls for $0.76 and bought 10,000 of the 10.50 calls for $0.23 today, optionMONSTER's Heat Seeker system. Volume was below previous open interest in the lower-strike contracts but above it in the higher strike, indicating that a position was rolled higher.

The trader is apparently taking some money off the table and opening new long calls at a strike that is $1 higher. But these contracts will expire worthless if shares remain below the $10.50 strike price. (See our Education section)

JCP is down fractionally to $10.04. Shares had trended steadily lower since beginning the year above $20, but the stock has regained some ground in the last month as management claims that a sales turnaround is taking hold at the beleaguered department-store operator.

Total JCP option volume exceeds 82,000 contracts today, surpassing its full-session average on this truncated trading day. Overall calls outnumber puts by about 2 to 1. 
Share this article with your friends


Related Stories

JCP

J.C. Penney call buyers back for more

June 3, 2016

The department-store operator is down 26 percent in the last three months, but traders are snapping up calls in the name for the second week in a row.

OptionsHouse

Premium Services

Education & Strategy

Know the risks behind covered calls

Selling calls is a popular strategy for both retail and institutional traders, but they typically do it in very different fashions.

View more education articles »