Shares of J.C. Penney (JCP) are trading higher on the session by 1.71%, at $24.42. The stock has been ticking lower over the past six weeks after testing and failing at the 200-day moving average. The company is set to report Q3 earnings on November 7th, before the open.
One trader is protecting against the downside today and is purchasing a ratio spread. A short while ago the December $24/20 put spread was purchased 12,500×25,000 times for a net debit of $0.71. The $24 strike was bought, above the spread, at $2.03, while the $20 strike was sold, on the bid, for $0.66. Volume exceeded open interest on both strikes.
Put volume is now running at 3x normal volume with 72,226 puts traded.
30-day implied volatility is up 0.8% today to 73.67%, while 10-day historical vol is registering 43.39%.
J. C. Penney Company, Inc., incorporated in 2002, is a holding company. The company is a retailer, operating 1,102 department stores in 49 states and Puerto Rico as of January 28, 2012.?