Big Lots Reports Smaller-than-Expected Losses

Options traders are placing their bets on the security's next moves

Deputy Editor
Aug 29, 2023 at 12:27 PM
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Another notable retail name is soaring today. Big Lots, Inc. (NYSE:BIG) stock is 32.2% higher this afternoon, last seen trading at $8.30 after the company reported a narrower-than-expected loss.

Digging deeper, the discount retailer reported second-quarter losses of -$3.24 per share on revenue of $1.14 billion, as comparable store sales declined less than Wall Street expected. Big Lots did warn, however, that budget-conscious shoppers have been "holding back on higher ticket items, due to concerns about the economy." 

Options traders are responding to the report. The 7,080 calls and 4,919 puts traded so far is nine times the volume typically seen at this point. The most popular positions by far are the September 7.50 put, where new positions are opening, followed by the 7.50 call in the same monthly series. 

Analysts have yet to weigh in on earnings, but all eight covering brokerages rate BIG a "hold" or worse. Meanwhile, short interest saw a 13.2% fall over the last month, yet the 6.25 million shares sold short make up 22.5% of the stock's available float. It would take three days to buy back these bearish bets, at the security's average pace of daily trading. 

Bouncing from the $6 level, today's pop has Big Lots stock trading back above its 10-day moving average, which began pressuring it lower in early August; however, the 80-day trendline is keeping this positive price action in check. BIG is holding above its 2023 low of $4.78, but is saddled with a nearly 44% year-to-date deficit. 

BIG Chart August 292023


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