Traders See Rough Road Ahead for Macy's, Inc. (M)

Macy's, Inc. (M) is seeing an uptick in put volume

by Josh Selway

Published on Apr 28, 2015 at 3:28 PM
Updated on Jun 24, 2020 at 10:16 AM

Puts are running at an accelerated pace today on Macy's, Inc. (NYSE:M). The contracts are changing hands at a 60% mark-up to normal volumes, and traders have taken an interest in the May 65 put. Data gives the impression of buy-to-open activity here, meaning traders are anticipating M to drop below $65 by the close on Friday, May 15, when front-month options expire. The shares haven't seen the south side of this level since April 1.

The equity's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.66, meaning put open interest outweighs call open interest by a wide margin among stocks expiring within the next three months. Also, this ratio ranks only 3 percentage points from an annual high, meaning short-term options traders are more put-skewed than what's normally seen.

Analysts have also taken a skeptical outlook on the shares. Nine of the 16 brokerage firms with coverage on the stock say it's a "hold" or a "strong sell." Not to mention, M's average 12-month price target of $68.74 is only 4.5% above current levels.

All of this pessimism would make you think Macy's, Inc. (NYSE:M) has been struggling on the charts, but that really hasn't been the case. During the past 12 months, the shares have added 13.3%, and hit a record high of $69.98 on April 8. At last check, M was down 0.2% at $65.81.


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