IB Options Brief: GNC Holdings Inc. (GNC)
Traders Bulk Up On GNC Put Options As Shares Slide
GNC ñ GNC Holdings Inc.
Put options on the specialty retailer of health and wellness products are more active than usual today, with shares in GNC Holdings trading down more than 6.0% to $38.48 in the first half of the session. The stock jumped to a record high of $41.95 at the end of last week after GNC posted better-than-expected first-quarter earnings and raised its outlook for the full year. Despite todayís pullback, shares in GNC Holdings, Inc. are up better than 30.0% this year.
Trading traffic in June expiry puts this morning suggests one or more strategists are positioning for shares in GNC to continue to pull back off the April 27th high during the next couple of months. The bearish activity follows reports that the FDA sent letters to a number of firms marketing products with the ingredient DMAA (dimethylamylamine). The FDA said such products, available at GNC, Vitamin Shoppe and others, may potentially increase blood pressure in users.
More than 4,400 puts changed hands at the June $36 strike against open interest of 352 positions, with the bulk of the volume purchased at $1.35 apiece. Put buyers may profit at expiration in June if shares in GNC drop 10.0% to breach the effective breakeven price of $34.65.
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