Call Volume Soars on Surging Sears Holdings Corporation (SHLD)

Sears Holdings Corp (SHLD) short sellers have to be nervous


Published on Apr 1, 2015 at 10:53 AM
Updated on Apr 20, 2015 at 5:09 PM

Sears Holdings Corp (NASDAQ:SHLD) has been picking up the pace on the charts recently. Thanks to support from its rising 20-day moving average, the stock has managed to outperform the S&P 500 Index (SPX) by 28.7 percentage points during the past two months. That trend is continuing today, as SHLD was last seen 5.9% higher at $43.83.

Daily Chart of SHLD since February 2015 With 20-Day Moving Average

The shares are surging on news that the company has entered a joint real-estate venture with General Growth Properties Inc (NYSE:GGP). That's not all, though. The company also plans to form a real estate investment trust (REIT), known as Seritage Growth Properties, which is expected to be valued at roughly $2.5 billion.

SHLD's recent technical success has to have short sellers shaking in their boots. Over 11 million of the stock's shares are sold short, accounting for over five weeks of trading, at normal daily volumes.

Heading to the options pits, the equity's calls are in high demand today, changing hands at six times the normal intraday pace. SHLD's most popular contract is the weekly 4/2 47-strike call, where 900 contracts have been exchanged.

This accelerated call activity echoes what's been seen in Sears Holdings Corp's (NASDAQ:SHLD) options pits lately. The security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.57 ranks higher than 74% of similar readings taken in the past 52 weeks.

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