Big Lots is drawing a large downside position as the stock sits just above technical support levels.
BIG finished last week at $35.43, gaining 1.4 percent on Friday. The closeout retailer saw another bounce at the $35 level, which has held as support since October 2011. Shares traded near $46 as recently as April 23.
More than 9,200 BIG options changed hands on Friday, compared to a daily average of 1,300. Virtually all of the action was in one put spread .
A trader sold 6,000 June 32.50 puts for the bid price of $0.85 and, seconds later, bought 3,000 June 35 puts for the ask price of $1.85, according to our Depth Charge system. The volume at each strike was well above the existing open interest, indicating that this was a new ratio spread .
The spread cost $0.15 to open, which will be lost if the stock remains above $35 through expiration. The maximum gain comes if BIGis right around $32.50 at expiration. Below that and the trader will be obligated to buy the stock if assigned. (See our Education section)
More From optionMONSTER
Happy demi-anniversary, stock market rally. Will the honeymoon ever end?