Safeway has reversed lower this morning, but a large trader sees a floor beneath the supermarket chain's stock.
optionMONSTER systems show that 7,538 June 15 puts have already changed hands, led by a block of 6,170 that was sold for $0.71. The volume was far higher than the previous open interest of just 299 contracts, so this is clearly a new position.
The put selling is a bet that SWY will hold above the $15 strike price in coming weeks. In collecting the $0.71 option premium, the trader is also willing to take the risk of buying shares at that level if they fall below it. (See our Education section)
SWY traded as high as $17.86 this morning but quickly lost ground and is now down 1.71 percent to $17.26. Shares had climbed to resistance at $18.50 last week, while the $15 level has been support since the stock hit a long-term intraday low of $14.73 in July.
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