Learn the trade here. Make it on tradeMONSTER

Options Trading News

November 20, 2013  Wed 9:44 AM CT

BBY: SEE CHART GET CHAIN FIND STRATEGIES
Best Buy is trying to rebound from a steep selloff yesterday, but one large trade is betting that gains will be limited.

optionMONSTER systems show that 7,500 each of the January 42 and 48 calls traded. The 48s were bought for the ask price of $0.43, while the 42s were sold for the bid price of $1.57. The volume at both strikes was more than open interest, so this appears to be a new credit spread.

That means the trader takes in $1.14 of credit, which will be kept as profit with BBY anywhere below $42 at expiration. The maximum potential loss is $4.86 if BBY is above $48. (See our Education section)

BBY is up 1.34 percent this morning to $39.29, but that makes up for just a small part of the losses from the previous session. Shares of the electronics retailer closed at $43.56 on Monday but then gapped down after yesterday's quarterly results.

More than 28,000 BBY options have traded, topping the daily average over the last month of 21,000. 
Share this article with your friends


Related Stories

BBY

Trader repairs position in Best Buy

August 1, 2014

The electronics retailer dropped sharply in January after a weak holiday season hurt sales, but then followed up with better-than-expected profit in February and May.

BBY

Best Buy draws bearish position

July 22, 2014

The electronics retailer has recovered half the losses from its plunge in January, but yesterday one large trader was positioning for a pullback.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Repairing losers with ratio spreads

Last week we mentioned the "stock repair strategy." This week is a good time to follow up, given the action...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER