Options Bears Shopping at J.C. Penney

J.C. Penney's same-store sales disappointed traders in April, and the sentiment is negative going into its monthly report.

OptionMonster's tracking systems detected the sale of more than 3,000 June 35 calls, most of which priced for $0.63 to $0.69. There was also buying in the June 33 puts and the June 35 puts, which reflects an overall expectation that the stock is headed lower.

JCP stock fell 4.06 percent to $36.64 yesterday (Thursday), closing decisively below its 100-day moving average for the first time since mid-2010. Same-store sales grew 6.4 percent in April, missing the consensus forecast for an 8.5 percent gain. Management also raised guidance less than expected, and stock gapped lower as a result.

The shares have tried to fight their way back but have encountered a wave of selling pressure — even after the company reported good quarterly results on May 16. They appear to be rolling over, in contrast with other big department-store operators such as Macy's and Kohl's , which are still making higher lows.

Overall option volume was triple the daily average in J.C. Penney yesterday.


Russell has no positions in JCP.

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David Russell is a reporter and writer for OptionMonster.