Rite Aid's stock has been falling for the last six weeks, but one large trader is looking for a floor beneath the drugstore chain's shares.
RAD lost another 4.73 percent yesterday to $1.41, its lowest close since the first day of February. Shares had traded steadily higher for five-months until hitting a 52-week high of $2.12 in mid-March, but they have fallen sharply since then.
optionMONSTER's systems show that a trader sold 20,000 June 1.50 puts yesterday with a block of 15,680 going for $0.25. There was no previous open interest at that strike, so this was a new position.
The put selling is a bet that RAD's current levels will hold, as the trader will keep the credit as profit if shares are above $1.50 at expiration. The trader may also be looking to buy the shares at a lower cost, picking them up at an effective entry price of $1.25. (See our Education section)
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