Eddie Lampert'sname is thrown around a lot these days whenever speculation of a buyout in the retail sector comes to the front of the rumor mill. Today, his name is once again surfacing but this time his Sears Holdings is being linked to rumors of a buyout of grocer Safeway, not a Macy's LBO.
One reason? There is a lot of abnormal activity in the options market around SWY. According to Jon Najarian of Options Monster, there is unusual buying activity happening around Safeway today. He says option implied volatility has spiked to 35 in August calls, "an indication that buying has overcome the sellers and they are demanding more premium to protect their sales. Safeway traded just 375 calls yesterday and averaged just 1,737 calls per day in June, so today's 12,500 contract surge on the call side is very interesting and very quickly moved SWY to the top of the rumor heap."
In the equity market, SWY shares are trading up almost 5% so far today and SHLD share are down more than 1%.