J.C. Penney has been rebounding, and one investor thinks it has a little more room to run.
He or she bought 8,300 April 9 calls for the ask price of $0.44, according to optionMONSTER’s Heat Seeker monitoring program. At the same time they sold 16,600 of the 10 calls for their bid price of $0.14. The volume at both strikes was more than the previous open interest, so this was a new opening call ratio spread.
It cost $0.16 to open, which is the most that can be lost if the department-store operator remains below $9. The maximum gain comes at $10, while the trader has to sell shares above that level. He or she probably owns stock and is using the spread to make the most from a limited push.
— Option Monster