PetSmart reports earnings next week, and one investor is looking
for a move.
optionMONSTER's tracking systems detected the purchase of 1,500
December 35 puts for $0.60 and 1,500 December 40 calls for $1,
resulting in a net cost of $1.60. Volume was more than 9 times open
interest in both strikes.
PETM is up 0.60 percent to $38.76 in morning trading after hitting
an all-time high of $39.28 yesterday. The pet-store chain has a
track record of making big moves in association with earnings
reports in the last year or so, gapping higher amid bullish news on
Aug. 19, March 4, and Oct. 14, 2009. The next release is scheduled
for after the bell on Nov. 17.
Today's option strategy, known as a long strangle, will make money
if PETM leaps above $41.60 or falls below $33.40. It's a common
trade that investors implement shortly before a big news event that
could caused a gap higher or lower. (See our Education section)
Overall options volume is 12 times greater than average in the
stock so far today.
(Chart courtesy of tradeMONSTER)
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