Implied volatility in the options in Sears (SHLD) jumped today. Shares are down $11.58 to $34.27 and came under fire this morning after the retailer said total sales for the quarter are projected to be down 5.2 percent. Sears also said it was shutting 100 – 120 Sears and KMart full-time stores. Meanwhile, options volume on the stock so far is 15,000 calls and 25,000 puts, which is 6X the daily average. January 25 puts are seeing the most volume. More than 5,000 trraded. Jan 27.5, 30 and 35 puts on Sears are seeing interest as well. The big move in the underlying and the heavy options volume have conspired to lift implied volatility in SHLD options up 31 percent to 84 and new 52-week highs.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.