SWY – Safeway Inc. – Grocer Safeway has had a nasty reversal of fortunes, at least as reflected in the performance of its share price having marched to above $27 in mid-April. Since then, however, its share price has slumped to $19.47 at the beginning of this month. During the last several days put open interest appears to be on the rise specifically at the $20 strike expiring next month. If today’s put-selling is anything to go by it seems that some investors are calling for an end to the slide. A couple of notable chunks of puts were traded inspired by sellers today and we reckon that tomorrow’s reading of open interest will reveal additional bullish sentiment building. The puts are trading at around 70 cents per contract implying that losses would accrue on a break even basis beneath $19.30.
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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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