Someone apparently thinks that Select Comfort is going back to
the old highs.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,010 December 25 calls for $2.35 and the sale of an
equal number of December 35 calls for $0.37. There was barely any
open interest at either strike before the trade appeared,
indicating that new money was being put to work.
The trade cost $1.98 and will generate a maximum profit of 405
percent if the mattress stock closes at or above $35 on expiration.
section for more on the strategy, which is known as a
bullish call spread
because it leverages a move between two prices.)
SCSS fell 0.04 percent to $22.47 yesterday. The stock had an
explosive run between mid-2009 and April 2012 as a shift to new
types of bedding drove the shares up more than 3,000 percent. It's
been languishing since then as growth slows.
The shares seem to have made a
around $17 in recent months and have been working their way higher
since. Yesterday's trader is apparently looking for a return to the
all-time high near $35 made last year.
Total option volume was 6 times greater than average in the
session, with calls outnumbering puts by 30 to 1.
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