Unusual Options Activity: Bed Bath & Beyond (BBBY)

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  • At least one trader is betting on a rally in Bed Bath & Beyond (BBBY) around the Black Friday holiday. That’s based on the December 4th $21 call option. Expiring in 10 days, the option saw over 6,850 contracts trade against a prior open interest of 214, for a 32-fold rise in volume.

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  • The buyer of the calls paid about $0.84 per contract. With shares just over $21, this is an at-the-money trade. The buyer will make a profit as long as shares are over $21.84 on December 4th.

    Shares of the company are up 49 percent in the past year. The company’s streamlined operations over the past year have brought it away from the brink of bankruptcy. While the company isn’t profitable yet, it’s moving towards that rapidly, and its operational performance this holiday season may lead to a profit in the 4th quarter.

    Action to take: This is a bit of a coin flip trade, as it will either be a triple-digit winner or will be a loser. Given the performance of retail stocks in the past few weeks, the market is siding on a winner. This is a worthwhile trade for a retail-focused week. Given the short amount of time on the trade, traders will need to pay close attention to this trade when looking for a quick profit.

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