American Express just can't get any credit from investors.
Shares of the charge card giant hit a 52-low on Tuesday after a Guggenheim Partners downgrade and last week's stunning development that Costco would end an exclusivity deal with the company. Despite the selloff, some options traders are betting on a quick rally this week.
In a series of trades that attracted some attention in the option pits, one trader bought 2,000 contracts of the Feb. 27 weekly 80-strike calls for 70 cents each. Since each call contract controls 100 shares, the total cost of the trade is $140,000 ($70 x 2000) and it is only profitable if American Express shares are above $80.70 by the end of next week, or about 3 percent higher than Tuesday's close.