Bearish Outlook into BJRI Earnings
Paper bought 5,000 BJRI May 40 puts & sold 5,000 May 35 puts for a net debit of 1.00
BJ’s Restaurants Inc., trading 41.22 (down .25) with an IV30 of 39.01 up about 1% and an HV10 of 13.30, has earnings coming up in the next week. Traders do not appear to be hopeful in this rarely traded name. The stock with an ADV of 91 contracts and open interest of just over 5k contracts saw a trader execute a large put spread expiring in May. The customer bought 5k of the May 40 puts for 1.30 and 1.25 and sold 5k of the May 35 puts at .30 and .25. All told the customer bought 5k May 35/40 put spreads for 1.00.
This appears to be a customer thinking earnings will miss, or a customer setting up a hedge against a long position. The trade will make money if BJRI drops below 39.00 a share between now and May expiration.
This trade should be considered bearish the name and bullish volatility.
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