How RadioShack Corporation (RSH) Shorts Came Out on Top

RadioShack Corporation (RSH) is reportedly preparing for bankruptcy

Jan 15, 2015 at 10:54 AM
facebook twitter linkedin


Option traders have displayed a bullish bias toward RadioShack Corporation (NYSE:RSH) in recent months, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 50-day call/put volume ratio on this trio of exchanges sits at 2.32 -- in the 67th percentile of its annual range.

Speculators outside of the options arena have taken a decidedly different angle, though. In fact, more than 23% of the equity's float is sold short, and it would take nearly six sessions to cover these shorted shares, at RSH's average daily pace of trading.

Looking at the charts reveals it's short sellers who are winning the game on the struggling electronics chain. Year-over-year, the equity has lost roughly 86% of its value, and more recently, the stock has spent the past four months wallowing in penny-stock territory.

Despite a dead-cat bounce earlier this week on news of a half-billion-dollar lifeline, the equity quickly resumed its downtrend, and today, is off nearly 30% on reports the company is preparing to file for bankruptcy as early as next month. Additionally, the security tagged $0.26 out of the gate -- its lowest mark on record -- and was last seen trading at $0.29.

Daily Chart of RSH Since January 2014
 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners