Bed Bath and Beyond (BBBY) is off $10.83 to $62.84 on heavy volume of more than 7 million shares after the retailer reported an 89-cent per share first quarter profit yesterday afternoon. The EPS number was a nickel better than Street estimates, but revenues fell short of expectations and the company lowered guidance for the second quarter. The stock is reeling on the results and options on BBBY are heavily traded. 13,000 calls and 20,000 puts so far. The action has been in smaller lots. The top trade is a Weekly 65 – 75 put spread at $9.80, 470X, and possibly liquidating position, as it appears that a seller initiated the trade. Both contracts are now in-the-money and also expiring after tomorrow. Interestingly, out-of-the-money Weekly and July 65 calls are the most actives and seeing some activity at the offer, suggesting that some investors might believe today’s 15 percent drop in the underyling is overdone.
About the Author (Author Profile)
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.