Unusual Options Activity: Macy’s (M)

Department store chain Macy’s (M) sank to a new 52-week low, with shares down 22% over the past year. One trader sees further weakness into the summer.

  • Special: Every Time the Government Releases Jobs Data... Make This Trade the Night Before!
  • That’s based on the August $12 puts. With 210 days until expiration, 6,506 contracts traded compared to a prior open interest of 102, for a 64-fold rise in volume on the trade. The buyer of the puts paid $0.97 to make the bearish bet.

    Macy’s shares recently traded just under $14, so the stock would need to decline another $2, or about 14%, for the options to move in-the-money. The drop would also put the stock down nearly 50% from its 52-week high of $22.10.

    Consumers continue to move away from shopping at department stores.

    In addition to making more store closures in the past year, Macy’s has seen revenues drop by 4% and earnings have been negative. Plus, total debt has now topped $6 billion, or about 10 times the company’s cash.

  • Special: $1,300 into $45,000 in just 4 MONTHS?!
  • Action to take: With deteriorating financials and poor operating performance, investors are better off elsewhere in the retail space. It’s possible an acquisition offer is made that could mean a boost in shares, but not a large one given the rise in debt.

    For traders, the August $12 puts are well positioned for further weakness in the first half of 2025. Given the low price of the option, traders could see high double-digit returns.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

  • Special: Every Time the Government Releases Jobs Data... Make This Trade the Night Before!