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June 14, 2013  Fri 11:14 AM CT

JCP: SEE CHART GET CHAIN FIND STRATEGIES
J.C. Penney continues to pull back today, and one large trade is positioning for further downside in the stock.

optionMONSTER systems show that a trader has sold more than 8,000 June 17 puts for $0.13 against previous open interest of more than 21,000 contracts. A the same time, he or she bought the same numbers of the July 17 puts for $0.73 in volume that was twice the open interest in that strike, clearly indicating that this is a new position.

The trader is rolling the June puts, which expire a week from today, to allow more time for the trade to work. This could be an outright bearish play, but it is quite likely a protective hedge on a long-stock position. (See our Education section)

JCP is down 2.26 percent to $17.74 in early afternoon trading. Shares of the department-store operator have support around this level but have been trending lower after failing to break upside resistance at $20 last month. The stock was below $14 at the start of April.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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