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Option Clips: RetailMeNot, Advanced Micro Devices, and J.C. Penney

Reviewing notable options activity on RetailMeNot Inc, Advanced Micro Devices, Inc., and J.C. Penney Company, Inc.

by 3/10/2014 2:47 PM
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One equity generating buzz on StockTwits today is digital coupon concern RetailMeNot Inc (NASDAQ:SALE). Meanwhile, semiconductor name Advanced Micro Devices, Inc. (NYSE:AMD) and retail chain J.C. Penney Company, Inc. (NYSE:JCP) are also garnering notable attention in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • RetailMeNot Inc (NASDAQ:SALE) has plunged 8.1% to $40.05 today -- and was subsequently placed on the short-sale restricted list -- in the wake of last Friday's initial public offering (IPO) from sector peer Coupons.Com Inc (NYSE:COUP). Against this backdrop, put volume has soared to more than 11 times the average intraday pace, as speculators find an alternate route to bet bearishly on the security. Among the most active strikes is the April 35 put, and for those buying these contracts to open, the expectation is for SALE to retreat an additional 12.6% from its current perch over the next five-plus weeks. Considering the stock is up about 51% from its own IPO in mid-July, a portion of this activity could be at the hands of stockholders initiating protective puts against any additional downside.

  • Unlike last Friday's call-skewed session, Advanced Micro Devices, Inc. (NYSE:AMD) put volume has soared to more than five times the typical intraday pace this afternoon, with the July 4 strike leading the pack. Right out of the gate, one massive sweep of 12,000 contracts traded at an ask price of $0.51 apiece. Implied volatility (IV) rose with the transaction, and Trade-Alert suggests the positions were opened. Breakeven (at expiration) for these in-the-money puts is $3.49, which is the strike price minus the premium paid. At last check, the stock was off 2.4% at $3.86, despite Wedbush earlier calling AMD the "most underappreciated 2014 turnaround story," reaffirming its "outperform" rating, and placing the equity on its "Best Ideas" list.

  • The wind has been taken out of J.C. Penney Company, Inc.'s (NYSE:JCP) sails this afternoon, with the shares off 3.1% at $8.41. Short-term speculators are betting on continued struggles through week's end, buying to open JCP's weekly 3/14 8.50-strike put. Of the 6,791 contracts that have changed hands here, 76% have done so on the ask side, IV is up 7.5 percentage points, and volume outstrips open interest. Summing it all up, it seems safe to assume that new bearish positions are being initiated.


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