Market News

December 28, 2016  Wed 10:22 AM CT

Rite Aid is drawing bearish option activity after reporting poor quarterly numbers last week.

OptionMonster's market scanner shows that more than 5,500 March 7 puts were purchased mostly for $0.45 today. This represents fresh buying, as volume surpassed the strike's open interest of 2,064 contracts.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. These contracts are safer than shorting a stock directly, as the options limit the amount of cash that can be lost if shares rally. (See our Education section)

RAD is down 1.67 percent to $8.18 in morning trading but is up 6 percent in the last month. The drugstore chain missed earnings and revenue estimates last Thursday and is expected to announce its next quarterly results in pre-market hours on April 13.

Overall option volume is about average in RAD so far today, but puts outnumber calls by a bearish 4-to-1 ratio.

News Archives

Education & Strategy

From the AP Archives: If It's Not There...

I have talked at great length about the fact that as an individual investor, you do not have to be in the market at all times.

More education articles »