Market News

November 23, 2016  Wed 5:47 AM CT

Traders are positioning for a possible drop in Rent-A-Center.

OptionMonster's monitoring program shows that 2,500 March 12.50 puts were purchased for $1.75 and $1.85 at the same time yesterday. This is clearly a new position, as open interest in the strike was a mere 55 contracts before the trade occurred.

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. (See our Education section)

RCII rose 5.58 percent to $12.30 yesterday and is up 23 percent in the last month. The equipment-leasing company is expected to report earnings after the close on Jan. 30.

Overall option volume was 6 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 3-to-1 ratio.

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