Credit: Shutterstock photoMacy's has been attempting to grind its way higher as same-store sales improve, and one investor is betting that it will remain in a broad range.
optionMONSTER's tracking systems detected the sale of about 10,000 June 23 puts for about $0.36 and an equal number of June 27 calls for $0.43. Volume was 79 and 17 times open interest at each strike respectively.
The trade, a short strangle, resulted in a credit of $0.79. The investor will get to keep that money if M remains between the two strike prices on expiration.
The retailer, which is up 1.92 percent to $25.46 in midday trading, has been trending higher since January 2010. It's been making higher lows and following its 200-day moving average upward but appears to face significant resistance around $26.
Today's strangle seller apparently thinks M will remain trapped over the next two months, with selling pressure above and support not far below. (See our Education section for more on how investors can use market-neutral strategies to make money from such conditions.)
M's last earnings release on Feb. 22 beat forecasts and management said it would raise prices to offset rising costs. Its monthly same-store reports for April and March were also better than expected.
Overall option volume in the name is almost triple the average amount so far today.
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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.
