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November 23, 2016  Wed 4:45 AM CT

J.C. Penney attracted a highly bullish strategy yesterday.

OptionMonster's market scanner shows that 7,500 Weekly 10 calls expiring on Dec. 9 were purchased for $0.20 while 7,500 Weekly 9 puts in the same expiration were sold for $0.09. These are clearly new positions, as volume was well above open interest in both strikes.

This combination trade is especially bullish because a rally would boost the price of the long calls while decreasing the value of the puts that were sold. But the opposite will occur if the stock drops, and the trader will be on the hook to buy shares if they fall below $9 by expiration. (See our Education section)

JCP rose 3.85 percent to $9.72 yesterday but is down 8 percent in the last three months. The department-store operator reported mixed quarterly results on Nov. 11 and is expected to release its next earnings numbers after the close on Feb. 23.

Overall option volume in JCP was twice its daily average yesterday.

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