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Macy's bulls hope for holiday bounce

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Macy's has been falling with many other retailers, but traders are looking for a bounce by the holiday shopping season.

More than 5,700 November 48 calls have traded in a bullish pattern today, led by a block of 2,854 purchased for $0.78, according to optionMONSTER's Heat Seeker real-time tracking system. The volume was well above the strike's open interest of just 717 contracts before the session began, indicating that this is fresh buying.

These long calls lock in the price where traders can buy the stock by mid-November no matter how far it might rise. They could be sold earlier at a profit if premiums gain with a rally before then, but the contracts will expire worthless if shares remain below $48 in the next three months. (See our Education section)

M is down 0.51 percent to $44.56 in afternoon trading. The department-store operator gapped down from $48.50 on Aug. 14 after reporting weak quarterly results and guidance, and shares have continued to slide since.

Total option volume in the name is nearly 50 percent higher than its full-session average for the last month. Overall calls are outpacing puts by more than 5.5 to 1.

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