Macy's, Inc. (M) Calls Hot on CEO Switch

Macy's, Inc. (NYSE:M) calls are outpacing puts, following the company's CEO announcement

by Josh Selway

Published on Jun 23, 2016 at 3:12 PM

Calls are outpacing puts by a 6-to-1 margin on retail stock Macy's, Inc. (NYSE:M), after the company announced Jeff Gennette would replace Terry Lundgren as CEO in 2017. At last check, call volume was hovering in the 83rd annual percentile, and the July 34 call has emerged as the most popular option overall. Data suggests some M options traders are opening long positions here, betting on the stock to rise above $34 before expiration at the close on Friday, July 15. 

Call buying in M's options pits is far from a fad. In fact, the stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.57 outstrips 94% of all comparable readings from the past year. Said differently, call buying has been unusually popular in recent months. 

This seemingly upbeat outlook isn't shared among analysts, though. Of the 14 brokerage firms that cover M stock, just one recommends buying it. 

This bearishness should not be surprising, given Macy's, Inc.'s (NYSE:M) long-term technical struggles. Over the past 12 months, the shares have lost more than half their value to trade at $33.32. And even though M stock is up 1.6% today, it appears to be running out of steam near its 10-week moving average, which it hasn't eclipsed on a closing basis since the first week in April. 

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