Bearish Traders Feast on P.F. Chang’s China Bistro Put Options

PFCB – P.F. Chang’s China Bistro, Inc. – Bearish options traders are feasting on P.F. Chang’s put options this morning to position for the price of the restaurant operator’s shares to extend losses through September expiration day tomorrow. Shares of the owner of P.F. Chang’s China Bistro and Pei Wei Asian Diner plunged 8.525% in morning trading to touch down at an intraday low of $43.67. Investors unsure of how low the stock could go purchased approximately 1,250 now deep in-the-money puts at the September $45 strike for an average premium of $0.85 early in trading session. Traders who paid an average of $0.85 for the puts wisely picked up the contracts this morning because the same September $45 strike puts now tout an asking price of $1.60 per contract as of 11:35 am ET. Put buyers are positioned to amass profits to the downside should PFCB’s shares trade below the average breakeven price of $44.15 through expiration tomorrow. Options implied volatility on the restaurant operator is up 15.4% to stand at 42.92% just before 11:40 am ET.

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Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

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