Bears shop for drop in J.C. Penney

Shares of J.C. Penney are just off four-year lows, and one long-term trade is anticipating even more downside.

A trader bought 10,000 January 2014 10 puts for $1.39 on a wide bid/ask spread, optionMONSTER's Depth Charge tracking system shows. Open interest in the strike was just 517 contracts at the beginning of the day, so this is a new position.

The put buying wasn't tied to any trading in the underlying stock identified by our scanners. It could be hedging , but that seems very unlikely given how far out of the money they are. So it appears to be a straightforward bearish play that is looking for JCP to fall below $10 by expiration in early 2014. (See our Education section)

JCP was up 2.93 percent yesterday to close at $17.24. The struggling department-store operator fell to $15.69 on Friday, its lowest level since March 2009.

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