Best Buy draws bearish position

optionMONSTER

Best Buy has recovered half the losses from its plunge in January, but yesterday one large trader was positioning for a pullback.

optionMONSTER systems detected the purcahse of 4,291 December 27 puts for $1.66 and the sale of 4,291 December 34 calls for $1.26. Volume was more than twice the previous open interest in each strike, indicating new positioning.

This could be an outright bearish play looking for BBY to fall below $27. However, this type of trade is very often a protective collar done against long shares to guard against a drop. (See our Education section)

BBY was up 0.13 percent yesterday to close at $30.13 but is still down some 25 percent since the start of the year. The electronics retailer has been trending higher since posting a 52-week low of $22.15 at the end of January.

The company is scheduled to report earnings on Aug. 26.


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