Hhgregg draws bulls before earnings


Shutterstock photo

Hhgregg has dropped to long-term support levels, and the bulls are stepping in before the company's earnings report this week.

optionMONSTER's tracking programs detected the purchase of about 4,000 June 9 calls for $0.95 to $1.10 on Friday, with the single largest block pricing for $1. There was no open interest in the strike before the trade appeared, so this is a new position.

Long calls lock in the price investors must pay for the stock. They can generate significant leverage if their underlying stock rallies but will expire worthless if it fails to move. (See our Education section)

HGG fell almost 4 percent late on Friday morning but then snapped back and finished the session unchanged at $9.59. The electronics chain has been struggling against tight competition and is trying to hold support around the same level where it bounced last year. The company's earnings results come out before the bell on Wednesday.

Overall option volume was 35 times greater than average in the session, with calls outnumbering puts by 12 to 1.

(A version of this post appeared on InsideOptions Pro on Friday.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com