Traders Piling into Best Buy Shares, Options

Shares of Best Buy are nearing new highs and drawing broad upside option activity along the way.

The big-box electronics chain is up 0.61 percent as of this writing to $44.38 and has risen some 22 percent since the beginning of March. After trading under $35 two months ago, the stock is now barely a dollar away from its 52-week high of $45.55 reached in December.

Wednesday morning, traders were snapping up calls at the May and January contracts. OptionMonster's real-time systems lit up with 10,767 calls traded at the May 48 strike, which included blocks of 4,180 and 3,394 bought for $0.38 and $0.40 respectively against open interest of 5,050 contracts.

Trading was also active at the May 46 strike, where more than 4,000 calls changed hands in a strong buying pattern for an average price of $0.80 above open interest of just 975 contracts. Our systems detected buying at the January 50 strike as well, with a block of 6,000 calls bought for $2.09 against open interest of 2,786 contracts.

Best Buy's stock has run higher along with the rest of the retail sector, where March sales may have made their best monthly showing in 16 years. The stock and other retail names also jumped yesterday as the Federal Reserve released meeting transcripts indicating that interest rates would remain low in the foreseeable future, a move seen as encouraging consumer spending.

The company is schedule to release its next earnings report on June 15. Overall calls in name have outnumbered puts by more than 5.5 to 1 so far today.


Yamamoto does not own shares of Best Buy.

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Mike Yamamoto is an analyst and writer for OptionMonster.