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Option Clips: J.C. Penney Company, Herbalife, and Clean Energy Fuels

Reviewing notable options activity on J.C. Penney Company, Inc., Herbalife Ltd., and Clean Energy Fuels Corp

by 1/16/2014 12:51 PM
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Three equities drawing attention from options traders today are struggling retailer J.C. Penney Company, Inc. (NYSE:JCP), dietary supplement specialist Herbalife Ltd. (NYSE:HLF), and natural gas issue Clean Energy Fuels Corp (NASDAQ:CLNE). Here's a look at how traders have been aligning their speculative bets today.

  • J.C. Penney Company, Inc. (NYSE:JCP) is down 3.7% today, after announcing a round of cost-cutting measures. In the stock's options pits, puts are trading at almost three times the typical intraday pace, and the most active position is the January 2015 4-strike put. Nearly all of the 20,399 contracts that have crossed the tape here have done so on the ask side, implied volatility is up 1.9 percentage points, and volume exceeds current levels of open interest, pointing to buy-to-open activity. At last check, JCP was churning near $6.74.

  • Shares of Herbalife Ltd. (NYSE:HLF) are also lower, down 6.6% to linger near $74.15, following news that China is investigating sector peer Nu Skin Enterprises, Inc. (NYSE:NUS). Despite this drop, one options trader appears to have readjusted her bullish front-month bet to the back-month series. Specifically, one large block of 7,000 January 2014 72.50-strike calls changed hands earlier at the bid price, suggesting it was sold. Meanwhile, a block of 10,000 February 77.50 calls traded at the ask price, implying it was bought. With these transactions occurring simultaneously, it seems the actions may have been related, and could be indicative of the speculator rolling her long call position up and out.

  • Clean Energy Fuels Corp (NASDAQ:CLNE) has been on the decline since hitting a late-December high of $13.69, with the shares off 10.3% to trade at $12.30. A number of speculators in today's session are betting on the stock to wallow south of the $13 mark over the next two-plus months. Of the 6,325 March 13 calls that have been exchanged so far, 79% have gone off at the bid side, and volume outstrips open interest, suggesting sell-to-open activity.


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