Retail is a major theme in the near term, and traders are
looking for a breakout in department-store operator Kohl's.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,000 August 55 calls for $1.80 and the sale of about
4,000 August 52.50 calls for $3.30. Volume was below open
interest at the lower strike, which suggests an existing long
position was rolled up to the 55s.
Calls lock in the price where investors can buy a stock, which
lets them profit from a rally with minimal risk of loss. They can
also roll capital from one contract to another to get the most
bang for their buck. See our
section for more on managing trades with options.
KSS rose 0.16 percent to $55.81 in afternoon trading. It's been
moving sideways for years, with the $58 area marking the top of
The next potential catalyst is the release of quarterly results
on Thursday morning. Attention will probably remain on the entire
industry group in coming sessions, with the Commerce Department's
retail-sales report due on Wednesday morning. Macy also reports
earnings, followed on Thursday by Wal-Mart, Nordstrom and J.C.
Today's trade in KSS let the investor recover about $960,000. It
also reduced their downside risk if the stock falls while keeping
them exposed to upside if it blasts through resistance.
Total option volume was triple the daily average, with calls
outnumbering puts by almost 5 to 1.
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