Investors are bracing for another lousy quarter from Barnes
& Noble tomorrow morning.
optionMONSTER's Depth Charge monitoring program detected the
purchase of 4,000 December 16 puts for $1.25. Equal-sized blocks
were sold in the December 17 calls for $0.47 and the December 14
puts for $0.32 at the same time. Volume was more than twice open
interest at all three strikes, indicating that new positions were
It cost $0.46 to open this combination trade, which will expand to
$2 if the book retailer closes at or below $14 on expiration. The
investor is also on the hook to sell shares for $17 if they go over
that level, so he or she is probably looking to
hedge a long position
BKS is up 1.64 percent to $16.07 in afternoon trading. It gapped
lower after profit missed expectations on Aug. 20 and June 25 but
has been trying to rebound since early October.
Today's investor may have bought shares for around $17 before the
last earnings report. This way, they can recover most of their
capital and remain hedged against further declines. (See our
section for more on how to redeem losing trades.)
Total option volume is 15 times greater than average so far in the
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