Another Put Opportunity

Add BIG Puts

By Bryan Bottarelli
Monday, March 26, 2007 11:22 AM EDT
Mon, 26 Mar 2007 15:22:00 GMT

Dear Bottarelli Research Member,

I’ve received three bearish indicators in shares of Big Lots (BIG – NYSE) and I’d like to take full advantage.

Big Lots is a closeout merchandise retailer with 1,401 stores across 47 states — and recently the company’s insiders have been taking massive amounts of stock holdings off the table. For example, sources at Thompson Financial reported this past week that twelve (12) Big Lots insiders have sold over 755,000 shares for proceeds of more than $22 million dollars. Why would 12 insiders all decide to sell in the same week?You have to wonder if the stock can continue its upside momentum — and this selling activity certainly indicates that the bullishness could quickly be coming to an end.

BIG

At the same time, the stock is experiencing weakness today after a strong upside run — which signals that the next down move could fill the gap between $25 and $28 which was set earlier this month. Combine this insider selling with a gap to fill on the downside, and you have a strong candidate for a new downside put play. Here’s the trade:

PLAY: Buy the Big Lots May 35 Puts (BIG QG) at or under $3.50, good for the day. Place a protective stop loss at $2.00.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From March 2007