RadioShack has made a big move, and now traders think it's ready
optionMONSTER's tracking systems detected the sale of 5,000 October
4 calls for $0.40 and 5,000 October 4 puts for $0.47. That totals
up to a credit of $0.87.
obligates the investor to unload a stock, making them effectively
short at certain levels.
forces him to her to buy shares on a drop, making them effectively
long. Combining the two strategies reflects a belief that the
retailer will move neither higher nor lower. If they're right,
they'll keep the $0.87 and both contracts will lose value over
time. (See our
section for more on the trade, known as a
RSH is down 1.5 percent to $3.93 this afternoon but has rallied
more than 40 percent since the beginning of August. That move came
as the shares rebounded from a multi-year selloff and returned to
their peaks from mid-May. Some chart watchers may now expect a
period of consolidation, which would explain today's option trade.
More than 14,000 contracts have traded in the name so far today,
compared with just 6,400 in a typical session.
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