On investor apparently thinks that Big Lots is at a solid
optionMONSTER's tracking programs detected the sale of about 4,500
October 30 puts for $0.14 to $0.20. Volume was almost quadruple the
previous open interest at the strike, indicating a new position.
The investor is now obligated to buy shares in the discount
retailer for $30 if they're below that level on expiration two days
from now. Above it, the contracts become worthless and the trader
will keep the credit earned as profit.
The benefit of
is that investors can make money from stocks they like without ever
having to buy shares. It also programs a buy order at a certain
level that they may consider an attractive entry point, in this
case $30. (See our
section for more on how options can be used to manage positions.)
That's the same level where the stock bounced several times in the
last two years and where it's been holding support since gapping
lower in August after a bad earnings report. This could be leading
some traders to believe that it will hold this level or push
BIG fell 0.94 percent to $30.60 yesterday. The put selling pushed
total option volume in the name to 11 times greater than average in
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.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.