(By Andrew Wilkinson) Groupon, Inc. (GRPN) – Shares in
Groupon are up 11.11% at $11.00 today on expectations the company may
report better-than-expected first-quarter earnings after the final bell.
Options on the stock are quite active as well, but not all of the
positioning is looking for a positive earnings surprise tonight. Fresh
interest building in the June expiry puts portends potential fresh
record lows for the shares in the near future. One-by-two June $7.0/$9.0
ratio put spreads purchased this morning position traders to profit
from limited bearish movement in the price of the underlying during the
next five weeks. Of the more than 3,300 put options in play at the June
$7.0 and $9.0 strikes, the largest blocks of options changing hands are
the purchase of 486 $9.0 strike puts spread against the sale of 972 $7.0
strike options, done at a net premium outlay of $0.33 per contract. The
ratio spread may be a profitable strategy should Groupon's shares drop
21.1% to slip beneath the effective breakeven point at $8.67. Maximum
possible profits of $1.67 per contract are available on the positions if
shares in the name drop 36.4% to settle at $7.00 at June expiration.
Groupon's shares on Friday traded down to an all-time low of $9.63.
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Dollar Tree Stores, Inc. (DLTR) – Bearish
options are in play on Dollar Tree, Inc. this morning ahead of the
discount consumer goods retailer's first-quarter earnings report on
Thursday. Shares in Dollar Tree are currently down 1.5% at $101.05 as of
12:50 in New York. It looks like the investor buying a sizable debit
put spread on DLTR this morning paid an average net premium of $3.31 per
contract for a roughly 3,000-lot June $85/$100 spread. The position
makes money if shares in Dollar Tree fall 4.3% to breach the average
breakeven price of $96.69, while maximum potential profits of $11.69 are
available in the event that shares plunge 15.9% to settle below $85.00
at expiration next month.
[Related -Groupon Inc (GRPN): Digital Coupons Could Be The Next Leg Of Growth]
Chico's FAS, Inc. (CHS) – Options
on the retailer of casual women's clothing and accessories attracted
bullish plays on Monday morning as traders await the company's
first-quarter earnings report on Wednesday. Shares in Chico's are
bucking the broad market decline today, trading up 1.8% at $14.67 as of
12:30 pm ET. In-the-money call buyers in the May expiry are ready to
profit should shares in the retailer extend gains ahead of expiration.
It looks like one or more players snapped up 1,600 calls at the May $14
strike for an average premium of $0.90 apiece. Call buyers make money if
shares in the name rally another 1.6% to top the breakeven price of
$14.90. Shares in the apparel retailer touched a six-month high of
$16.07 as recently as May 2nd.