Wednesday, December 20, 2006
BBBY - Bed Bath & Beyond
I've been a bit closer to home than expected today since number-1 son is home with a cold... so doing things around the house ahead of the holiday. Earnings of 52-cents a share are expected at Bed, Bath and Beyond after the bell today according to the Reuters survey. BBBY probably meets, if not exceeds... they are a catagory killer. I'm just wondering what's up with all the action in the Jan45 call options? Over 2,000 have traded today on a stock hovering at about $40 a share. Given the shabbiness of this chart action... ... that seems surprising since the stock has failed a few times to run past the $41 area. I've got no dog in the fight, but I'd be inclined to go with the Jan40 puts, where volume is actually heavier today, given that retailers have been forced to spend more on ad spending and to discount more heavily this year. In the last few days IV has ticked up from 29 to 33, so the risk for a move of a few dollars after earnings is being factored in, but no the $5 move that the Jan45 call players are hoping for. Guidance is probably where the downside risk may be, but it could end up being a draw as well. I just don't have the ability to know, so no play for me.