JCP – J.C. Penney Company – Shares of the department store operator fell as much as 8.05% this morning to secure an intraday low of $23.43. The sharp pullback in the price of the underlying stock inspired bearish investors to take action in the August contract. One investor purchased a plain-vanilla debit put spread on JCP, while others appear to be selling in- and out-of-the-money calls. JCP’s shares are currently down 6.40% to stand at $23.85 as of 11:55 am ET. The put-spreader purchased 750 now in-the-money puts at the August $24 strike at a premium of $1.16 each, and sold the same number of puts at the lower August $21 strike at a premium of $0.26 apiece. The net cost of the bearish transaction amounts to $0.90 per contract. The investor responsible for the trade makes money as long as JCP’s shares decline another 3.1% from the current price of $23.85 to breach the effective breakeven point to the downside at $23.10 by August expiration. Maximum potential profits of $2.10 per contract are available to the trader should J.C. Penney’s shares plunge 11.95% lower to slip beneath $21.00 by expiration day. As for activity in near-term call options, investors appear to be throwing in the towel on JCP, selling some 1,100 in-the-money calls at the August $23 strike for an average premium of $1.65 each. Call sellers may be ditching previously established bullish positions in order to take available premium off the table, or they could be initiating outright bearish bets that JCP’s shares will continue lower to trade below $23.00 through August expiration. Options implied volatility on the stock is higher by 7.7% to arrive at 46.48% as of 12:00 pm ET.