Upside Purchased on Saks (SKS)

Shares of Saks Inc. (SKS) are trading higher on the session by 1.84%, at $10.49. The stock has been range bound for the better part of the year, bouncing off of the $9.50 level and selling off near $12.00.

With shares finding some support near $10.00 after a month-long, 15% slide, one options trader is purchasing upside calls on SKS. 

A short while ago, the October $11.00 call was purchased 2,252 times, on the offer, for $0.15. The trader came back seconds later and bought 1,248 more contracts, also on the offer, for $0.20. With open interest of only 1,274, this is clearly new long positioning on the strike.

Implied and historical volatility have diverged over the past month, currently registering 38% and 23%, respectively. At $0.175, the Oct $11.00 call traded at roughly 42% vol. Clearly someone is expecting further movement in the name over the next few weeks; note that SKS is not scheduled to report earnings until November 13^th.

Saks Incorporated is a department store retailer. The company and its subsidiaries is engaged in the operation of Saks Fifth Avenue stores and SFA e-commerce operations, as well as Saks Fifth Avenue OFF 5^TH.

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.