Range-bound play targets Supervalu

optionMONSTER

A large trade is apparently looking for Supervalu to remain range-bound as the supermarket chain climbs back to levels of a year ago.

More than 34,000 SVU options have already changed hands this morning, compared to a daily average of 2,400, and almost all of the volume is in a single trade that is counting on lower volatility in the stock. optionMONSTER systems detected the sale of 15,000 each of the June 6 calls and puts for $0.32 and $0.40 respectively.

This creates a short-straddle position , which would take in a combined credit of $0.72. That would be kept as profit if SVU remains around $6 through expiration in mid-June. (See our Education section)

SVU is up 0.5 percent to $6 even. It has closed at this level the last few days, its highest since exactly a year ago. Shares were as low as $1.68 last July. 

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