A large trader is apparently repositioning for more downside in Select Comfort, which fell sharply after reporting earnings last week.
optionMONSTER's Depth Charge system shows that 3,000 December 24 puts were sold for $5.20 against open interest of 5,419 contracts today. Just after, our scanners detected the purchase of 3,000 December 20 puts for $2 against open interest of just 341 at that strike.
The trader appears to be rolling a put position lower in what is likely an outright bearish play rather than a hedge , given that he or she is moving to a strike that is still in the money . So the trader is taking profits off the table while still benefiting from further potential downside. (See our Education section)
SCSS is down 1 percent to $18.81 in early afternoon trading. The mattress maker gapped down from above $24 after announcing quarterly results on Oct. 16.
More than 9,100 SCSS options have changed hands, well while the daily average is less than 2,000 over the last month.
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