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.

News Archives
OptionsHouse

Education & Strategy

Election Sector Rotation

Sector rotation is the process where mutual funds, portfolio managers, and investors in general, shift their investments from one sector of the economy to another.

More education articles »