Some traders are giving up hope in Supervalu.
optionMONSTER's tracking systems detected the sale of more than
19,000 July 8 calls for $0.50 and $0.45 against open interest of
just 826 contracts. The trade pushed total option volume in the
grocery-store operator to more than triple its daily average.
Writing calls obligates the investor to sell SVU shares for $8 if
they close above that level on expiration. Including the credit
earned in the option trade, that translates into an exit price of
$8.45 to $8.50 on the stock. (See our
SVU fell 2.46 percent to $7.13 on Friday and is down 13 percent in
the last week. Most of that drop occurred after management cut
expectations for same-store sales on Jan. 11. That raised questions
about the company's ability to dig itself out from under a mountain
of debt resulting from the purchase of more than 1,100 Albertsons
stores in 2006.
The stock also fell after forming a
at its 200-day moving average, which could lead some chart watchers
to believe that its long-term downtrend remains in effect. Friday's
calls may have been sold by investors looking to earn income on an
existing position in the shares or by traders simply betting
against the name.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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