Upwards of 22,000 of the Jan ’14 $39 puts have traded thus far in the session, with the bulk of the volume in one print of around 16,380 contracts that appear to have been purchased at a premium of $1.55 each just after 10:00 a.m. EST. Open interest in the $39 puts is just a fraction of today’s volume at 1,030 contracts. The put contracts look for shares in Sears to extend losses during the next five weeks to expiration. The puts may be profitable at expiration next year if shares in Sears drop roughly 20% from the current level of $46.54 to trade below the breakeven point at $37.45. Shares in SHLD last traded below $37.45 back in January of 2012.
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