Shares of Safeway popped earlier this month on plans to spin off its gift-card unit, but one trader is positioning for a possible drop by next spring.
optionMONSTER's Depth Charge system detected the purchase of 5,328 March 13 puts for $0.50 in less than 5 minutes yesterday. Open interest in the strike was a mere 44 contracts at the beginning of the day, so this is clearly new buying.
SWY slipped 0.7 percent yesterday to close at $16.37. The supermarket chain gapped higher on Sept. 5 after announcing IPO plans for its Blackhawk Network gift-card business in the first half of next year and drew bullish call buying two days later, but shares have been trapped in a tight range since then.
Our systems did not identify any stock trades that were clearly tied to yesterday's option activity, but the puts could have been bought to hedge a previously established long position. If not, the trade appears to be a straightforward bearish bet that SWY will fall roughly 24 percent by expiration in six months. (See our Education section)
The trade pushed total option volume in SWY to more than triple its daily average in the last month.
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