What's behind put buying in Sears
Chris McKhann | [email protected]
More than 22,000 SHLD options traded, compared to a daily average of 2,300. Puts outpaced calls by 2 to 1, and topping the action was one print in the January 2015 30 puts.
optionMONSTER systems show that 11,111 changed hands as a trader bought a single block of 9,000 of those puts for the ask price of $3.90. This is clearly a new position, as open interest in the strike was just 382 before the session began.
The puts may have been tied to a long stock position as a protective hedge or a long-volatility play. But given the market action and how far out of the money these puts are, this could be a simple bearish position that is betting on levels not seen since the beginning of 2012. (See our Education section)
SHLD was down 6.8 percent to close at $48.70 yesterday. The department-store operator reached its highest level since mid-November in the morning, but yesterday's losses gave up gains of the last six weeks.