Cracker Barrel Old Country Store has been drifting lower since
hitting an all-time high three months ago, and now one bear is
looking for a big drop.
optionMONSTER's Depth Charge tracking system detected the purchase
of 3,000 December 40 puts for $1.85 and the sale of a matching
number of December 35 puts for $0.90. Volume was more than 11 times
open interest in both strikes.
This bearish put spread cost a net debit of $0.95 and will earn a
maximum profit of 426 percent if CBRL closes at or below $35 on
The restaurant and retail stock fell 0.35 percent to $47.80
yesterday and is down 9 percent since topping out at $53.43 on
April 22. Profit and sales were better than expected on May 25 and
management boosted full-year guidance, but the shares continued to
CBRL appears to be developing resistance at its 50-day moving
average (black line on chart) and has been trading below its
100-day moving average (red line) for the last two weeks, technical
factors that some traders may consider evidence of a bearish trend.
Overall options volume in the name was 22 times greater than
average in yesterday's session, with puts accounting for a bearish
98 percent of the activity.
(Chart courtesy of tradeMONSTER)
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