One investor is trying to call a bottom in Hhgregg.
optionMONSTER's tracking programs detected the sale of 1,873 May 10
puts for $0.30 and the purchase of an equal number of April 11 puts
for $0.45. Volume was below open interest in April but not May,
which suggests that an existing short position was rolled from one
contract to the other.
The trader apparently sold the April contracts at an earlier date
hoping that the electronics-retail stock would hold its ground. Now
that it's failed to do so, he or she extended the position by
HGG fell 1.65 percent to $10.71 yesterday. It peaked around $16 in
early December but crashed over the next two months and has been
attempting to hold its ground at $10 since. Similar to competitors
such as Best Buy, the company faces a market niche with evaporating
profit margins and weak sales growth.
Yesterday's call roll cost a net $0.15, but the investor lowered
the level at which the stock must be purchased. If the adjustment
hadn't been made and HGG closes below $11 today, the trader would
be assigned shares at the strike price. (See our
Overall option volume was 16 times greater than average in the
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