Rite Aid seen holding high levels


Rite Aid is at the highest levels in nearly six years, and traders are looking for the drugstore chain to hold those those gains after it reports earnings this morning.

A block of 28,000 January 3.50 puts was sold for the bid price of $0.30, according to optionMONSTER systems. The previous open interest was just 5,973, so this is clearly a new position.

The put seller is betting that RAD will hold above $3.50 through the beginning of next year. The trader takes on the risk of having to buy shares if they are below that price. (See our Education section)

RAD was up a penny yesterday to close at $3.71 after hitting an intraday high of $3.79, its best levels since the end of 2007. Shares have been trending up from below $1 at the end of 2012.

More than 48,000 RAD options traded yesterday, compared to a daily average of just 7,506 over the last month.

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