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Ho-hum trade on Collective Brands

Collective Brands reports earnings Wednesday afternoon, and one investor thinks it will be a yawner.

optionMONSTER's tracking systems detected the sale of about 3,500 September 10 calls, driving premiums from $0.65 to $0.55. Most of the large blocks priced at the bottom of that range. Roughly the same number of September 8 puts were sold around the same time for $0.20 and $0.15. Volume was more than 9 times open interest in both strikes.

The trade resulted in a credit of $0.70-0.85 and reflects a belief that the shoe retailer will remain trapped between those two strike prices for the next four weeks. Known as a short straddle, the strategy is designed to profit from the accelerating pace of time decay that will occur -- especially after results come out.

PSS rose 0.84 percent to $9.59 in afternoon trading, and has lost almost half its value in the last six months. Much of that drop followed a disastrous earnings report on May 25. Since then, its CEO has left the company, and now investors may expect that PSS will move sideways as it seeks new leadership and new strategies to drive business.

Its current price is the lowest since early 2009.

Overall options volume in PSS is 5 times greater than average so far today.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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