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February 5, 2013  Tue 9:43 AM CT

A short-term trade is looking for J.C. Penney to break above of below its recent range.
 
More than 5,500 Weekly 19 calls and puts have traded, compared to open interest of fewer than 1,000 at each strike, according to optionMONSTER's systems. Blocks of 2,510 changed hands at the same time with the calls going for $0.68 and the puts for $0.56.

The calls and puts both traded at the ask price, indicating that they were bought to create a straddle position at a cost of $1.24, which is the maximum risk by expiration at the end of this week. This combination trade can profit if shares move sharply in either direction and/or if the actual volatility of JCP is greater than that implied by the option prices. (See our Education section)

JCP is up 1.3 percent to $19.58 this morning. The department-store operator finished above $21 a week ago, its highest close since early November.
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