How to Play J.C. Penney

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Aug. 30 (Bloomberg) – Trading Advantage Sr. Market Analyst Alan Knuckman discusses his options strategy for J.C. Penney with Alix Steel on Bloomberg Television's "Market Makers.” (Source: Bloomberg)

That is going to do it for "market makers" today and this week.

We are off monday for labor day.

Thank you for joining me.

My pleasure.

Everybody out there, we hope you have a great long weekend.

We will talk to you about tuesday's show.

Subaru sales in the u.s. are soaring.

The the -- the challenge for subaru is enviable.

Ramping up to lead the search for demand.

-- ramping up to meet demand.

Right now it's time for on the markets.

Hoping you caught up on -- getting you getcaught up on the markets, at right now in the red.

Data could not help move this market.

Traders are really watching 1627 on the s&p. a close below that level could initiate some kind of pull back into the 1600 area.

Krispy kreme doughnuts, profits are trailing.

And we are also watching j.c. penney.

Shares are trading around a 10- year low.

That is just days after bill ackman had sold his stake for $12.60 a share.

Joining me from the cbot with his strategy, alan knuckman.

We have a real?


The stock is down -- we have a redux here.

The stock is down.

How much more?

We have a big loss by mr.

Ackman here.

He could not hold on any longer.

And funny how the markets turn when someone gives up on a position like that.

Looking at j.c. penney, we have not been down into the single digits in more than 10 years.

There are strategies you can use to take advantage of this increased distressed, and therefore the increased volatility.

What are you doing?

It is a straightforward strategy for a stocky want to own.

Ucla put.

And at the same risk profile as a covered call.

-- you sell a glut.

It has the same risk profile as a covered call.

I can sell the 12th put and i can take in about 60¢. my break-even is there.

Italy has six weeks until expiration.

-- three weeks until expiration.

I don't mind getting into j.c. penney at $11.40. it seems like your loss is a much bigger compared to your possible profit.

This is a stock portfolio want to put in long term.

More and partly from a is probably the standpoint, there is an 80% probability i will be able to keep that money.

If i do not mind buying the stock at a major discount and am also getting a 5% return on my wrist spyridon -- my risk.

Looking at it mathematically, it is very strong.

The worst-case scenario, i don't mind owning the shares from $11.40. gregg's we have about 20 seconds.

I'm interested in his other strategy on stocks you want to own, but not right now.

I have done is the blackberry, hewlett-packard, rim, stocks that are very distressed.

B. take advantage and buy at a low, low level.

Right now, "lunch money" is up next ?

This text has been automatically generated. It may not be 100% accurate.


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