Options Trading News

September 9, 2011  Fri 12:10 PM CT

Lowe's has hurt one investor, and now they're hoping that time will heal the wound.

optionMONSTER's tracking programs detected a surge of activity in the October 21 puts and the January 17.50 puts. About 15,000 of the October contracts were bought for $2.10 and $2.15 against existing open interest, while 20,000 of the Januarys were sold for $1.03.

The investor appears to have previously sold the October puts, betting that the home-improvement stock would hold its ground above $21. Shares then fell and have found themselves underwater. Today's adjustment lowers the level at which the trader must buy shares and provides more time for LOW to rebound.

Similar trades were common about a month ago after the market crashed in late July and early August. (See this column for more)

LOW fell 2.71 percent to $19.05 in afternoon trading. Sales missed estimates the last time it issued results on Aug. 15, and management cut guidance amid weak demand.

Overall option volume is 5 times greater than average today, with puts outnumbering calls by 19 to 1.
Share this article with your friends

Related Stories


Lowe's gets vote of confidence

November 25, 2015

The home-improvement retailer beat estimates on the top and bottom lines on Nov. 18, and traders are betting that it will hold its ground in coming weeks.


What's behind Lowe's put selling

November 18, 2015

The home-improvement retailer gapped up at the open after earnings beat expectations, but shares immediately pulled back.


Bulls target Lowe's before earnings

November 16, 2015

Appliance demand drove strong results in August, and now traders are buying calls in hopes of more good news this week.


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »