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Bears attacking Lumber Liquidators

Chris McKhann (chris.mckhann@optionmonster.com)

Lumber Liquidators has lost half its market value in the last five months, and one trader is looking for even more declines.

optionMONSTER systems show that two blocks of 1,250 August 60 puts were sold for $6.30 and $6.20 against previous open interest of more than 5,000 contracts. At the same time, a block of 2,500 November 55 puts was bought for $6 in volume far above open interest of just 406 in that strike, so that is a new position.

The trader is rolling the position forward as those August options, which are well in the money , will face increasing time decay as they near expiration in a few weeks. But because the new options are also in the money, this is likely an outright bearish play as opposed to a hedge on a long position. (See our Education section)

LL is down 0.45 percent to $54.97. The lumber retailer posted a low of $53.27 two weeks ago after gapping down on July 10. The stock was trading above $110 in late February.

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