Jack in the Box has risen sharply this month but is drawing some downside option activity ahead of its earnings report today after the market closes.
OptionMonster's systemsshow that trading in the fast-food name was concentrated at the February 20 contracts, where 3,257 puts changed hands in a strong buying pattern, mostly for $0.20 and $0.25. Volume has averaged a mere 29 puts at the strike, which had open interest of only 511 contracts.
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The stock ended yesterday's session up 0.78 percent to $21.85 and is up 12 percent since the beginning of February. Shares had encountered resistance around $21 for about five months but finally began to break above that level in the last week or so.
That momentum has not deterred yesterday's bearish put buyers, whose trades would be profitable only if the stock falls roughly 9.5 percent by expiration at the end of this week. The company is scheduled to release its fiscal first-quarter results after the closing bell.
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Mike Yamamoto is an analyst and writer for OptionMonster.