Options Activity for Pier 1 Imports, Inc. (PIR)
June 17, 2010
Pier 1 Imports, Inc. (PIR) yesterday announced plans to resume online selling "in the near future," halting a three-year hiatus of e-commerce. The house wares hotshot said the number of visits to its Web site have jumped 19% over the past year, which – combined with an improving economy and recent cost-cutting initiatives – sparked its decision to step back into the Internet sales game.
Option traders perked up in light of the news – and ahead of the firm's turn in the earnings confessional tomorrow – especially on the call side of the tape. By yesterday's closing bell, PIR saw more than 1,200 calls change hands – almost quintupling its expected single-session volume of fewer than 250 calls. Meanwhile, the security roughly 1,000 puts exchanged, more than tripling its predicted daily volume of about 280 puts.
Digging deeper into the data, it appears one trader was extending his moderately bullish position ahead of June options expiration on Friday. More specifically, it looks like the investor sold to close his in-the-money June 7.50 calls, and bought to open a batch of July 7.50 calls.
Nevertheless, yesterday's affinity for calls is pretty much par for the course among PIR option traders. During the past couple of weeks, speculators on the International Securities Exchange (ISE) have bought to open more than five PIR calls for every put, as indicated by the stock's 10-day call/put volume ratio of 5.01. The implication is that there are more than double the calls compared to their put rivals among options slated to expire within three months.
Historically speaking, the near-term option crowd has reason to be hopeful, as Pier 1 Imports has matched or exceeded the Street's per-share earnings forecast in each of the past four quarters, according to Thomson Reuters.
At last check, the shares of PIR have given up 0.9% to flirt with the $8.12 level.
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