This spread appears to be the trader betting that all is not lost in M for the holiday season.?
Macy?s Inc., which is currently trading 39.30 with an IV of 34% and a 10 day HV of 30.40, is seeing bullish call action today.? In what might be a roll down, or a fully opening trade, traders are buying the Jan 45/50 call spread paying .40.? These have traded in small blocks but total over 10,000 spreads.? This appears to be a roll down.? Currently open interest on the Jan 50 calls is over 12,000 while open interest on the Jan 45 calls is 3700.? Thus, at a minimum the customer is going long the Jan 45 calls.
This spread appears to be the trader betting that all is not lost in M for the holiday season.? The trader is paying .40 in the hopes that the underlying has a turnaround over the next few weeks and rallies back to 45-50 bucks a share, which would be a 15% move.
This trade should be considered aggressively bullish the underlying and bullish volatility.