Barnes & Noble Stock Continues Plunge After Another Weak Quarter

However, near-term options traders have been seemingly upbeat

by Emma Duncan

Published on Sep 6, 2018 at 9:52 AM
Updated on Jun 24, 2020 at 10:16 AM

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Shares of Barnes & Noble, Inc. (NYSE:BKS) are down 5% at $4.70 in early trading after the company announced a bigger-than-expected fiscal first-quarter loss and massive drop in comparable sales. In the earnings call, the book seller admitted that it understands cutting costs alone is not a "path to long term viability of any retail business." 

Barnes & Noble stock has struggled on a long-term basis, and has been unable to recover from a massive bear gap in January that paved the way to its March 1 record low of $4.10. Since then, both of BKS' noteworthy breakout attempts have been quickly capped by the 320-day moving average, pushing the retailer to its 30% year-to-date deficit. 

Digging into options, near-term traders remain seemingly upbeat, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.19 ranking in the low 21st annual percentile. In other words, call open interest for options expiring within three months outweighs put open interest by a wider-than-usual margin.

Lastly, short interest on Barnes & Noble stock rose 11.7% during the past two reporting periods, and now represents nearly 14.4% of the retailer's total available float. This means that at BKS' average daily trading volume, it would take shorts over two weeks to buy back their bearish bets.

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