RadioShack Faces Range-Bound Play

RadioShack has made a big move, and now traders think it’s ready to snooze.

optionMONSTER’s tracking systems detected the sale of 5,000 October 4 calls for $0.40 and 5,000 October 5 puts for $0.47. That totals up to a credit of $0.87.

Selling calls obligates the investor to unload a stock, making them effectively short at certain levels. Selling puts forces him to her to buy shares on a drop, making them effectively long. Combining the two strategies reflects a belief that the retailer will move neither higher nor lower.

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