Bulls shop for Conn's comeback
Someone apparently thinks that Conn's is ready for a comeback.
optionMONSTER's Heat Seeker monitoring program detected heavy call volume in the beaten-down retailer on Wednesday. About 5,900 January 19s were purchased, mostly for $0.85. Open interest in the strike was just 806 contracts before the trades appeared, indicating that new positions were initiated.
Long calls lock in the price where shares can be purchased, letting investors position for a rally at limited cost. They can also be used to hedge bearish bets, which may be a consideration in a stock where short interest accounts for almost half the float. (See our Education section.)
CONN rose 7.24 percent to $18.23. It's lost three-quarters of its value this year because of weak earnings and problems at its credit division. But other retailers have been strong recently, which could make some investors expect a rebound.
Total option volume in the name was 5 times greater than average, with overall calls outnumbering puts by 26 to 1.
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