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Will J.C. Penney keep pushing?

Chris McKhann (chris.mckhann@optionmonster.com)

J.C. Penney has been rebounding, and one investor thinks it has a little more room to run.

He or she bought 8,300 of the 9 calls calls expiring April 25 for the ask price of $0.44, according to optionMONSTER's Heat Seeker monitoring program. They sold 16,600 of the 10 calls at the same expiry for their bid price of $0.14. The volume at both strikes was more than the previous open interest, so this was a new opening call ratio spread.

It cost $0.16 to open, which is the most that can be lost if the department-store operator remains  below $9. The maximum gain comes at $10, while the trader has to sell shares above that level. He or she probably owns stock and is using the spread to make the most from a limited push.

JCP rose 2.20 percent to $8.83 in morning trading. It's almost doubled after hitting an all-time low of $4.90 early last month.

Overall option volume is still below average in JCP, but calls outnumber puts by more than 7 to 1.

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