OptionsHouse

Options Trading News

October 25, 2013  Fri 11:19 AM CT

SCSS: SEE CHART GET CHAIN FIND STRATEGIES
A large trader is apparently repositioning for more downside in Select Comfort, which fell sharply after reporting earnings last week.

optionMONSTER's Depth Charge system shows that 3,000 December 24 puts were sold for $5.20 against open interest of 5,419 contracts today. Just after, our scanners detected the purchase of 3,000 December 20 puts for $2 against open interest of just 341 at that strike.

The trader appears to be rolling a put position lower in what is likely an outright bearish play rather than a hedge, given that he or she is moving to a strike that is still in the money. So the trader is taking profits off the table while still benefiting from further potential downside. (See our Education section)

SCSS is down 1 percent to $18.81 in early afternoon trading. The mattress maker gapped down from above $24 after announcing quarterly results on Oct. 16.

More than 9,100 SCSS options have changed hands, well while the daily average is less than 2,000 over the last month. 
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  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 »