Conn's last earnings report was a stinker, and the bears are
bracing for another setback.
optionMONSTER's Depth Charge monitoring system detected the
purchase of 2,000 December 55 puts for $3.65 and the sale of a
matching number of December 45 puts for $1.05. Volume exceeded open
interest at both strikes, indicating that new positions were
Known as a
bearish put spread
, the trade cost $2.60 and will expand to $10 if the electronics
retailer closes at or below $45 on expiration. That would be a
profit of 285 percent. (See our
section for more on how to generate leverage with options.)
CONN is down 3.88 percent to $57.72 in morning trading. It hit an
all-time high of $69.32 in early September but gapped lower after
customer delinquencies hurt results at its credit segment. Timing
for the next quarterly release hasn't been announced yet, but last
year's calendar suggests it will occur in early December. So that
downside spread could be the work of an investor looking to hedge a
long position against a poor set of numbers.
Overall option volume is quadruple the daily average, according to
the Depth Charge. Puts account for a bearish two-thirds of the
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