Low-cost bet on Gannett

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GCI Gannett is bouncing after a steady decline, and one investor is making a low-cost upside bet.

optionMONSTER's Heat Seeker tracking system detected the purchase of 10,650 October 16 calls for $0.10 and the sale of an equal number of October 10 puts for $0.10. Volume was more than 4 times open interest in both strikes.

The strategy let the investor pay no money, aside from commissions, to wager on a rally in the beaten down newspaper stock. If GCI closes above $16 on expiration, he or she will make money. They'll lose money below $10 and walk away with nothing between those two levels.

The stock rose 4.23 percent to $13.30 yesterday and is up about 8 percent since bottoming out at a nine-month low of $11.66 on Aug. 24. It entered today's session down 30 percent from its peak in late April.

The publisher of USA Today reported earnings at the high end of expectations on July 17 amid weak revenue. However, there have been signs that the worst of the slump is over in the newspaper industry, and advertising stocks such as Interpublic Group have been showing strength.

Short interest represented an elevated 14 percent of GCI's float in mid-August, which could trigger forced buying if the shares begin to recover.

Overall options volume in the stock 12 times greater than average so far today.

(Chart courtesy of tradeMONSTER)



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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This article appears in: Investing , Options

Referenced Stocks: GCI , IPG

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