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Put Options on BKS on 8/23/2013

Bearish Flag on BKSBarnes & Noble (BKS) operates as a content, commerce, and technology company in the United States.

The company operates in three segments: B&N Retail, B&N College, and NOOK.

It provides access to books, magazines, newspapers, and other content through its multi-channel distribution platform. The company sells trade books, including hardcover and paperback consumer titles; mass market paperbacks, such as mystery, romance, science fiction, and other fiction; children’s books; eBooks and other digital content; NOOK products comprising NOOK HD, NOOK HD+, NOOK Simple Touch, and NOOK Simple Touch with GlowLight eBook reader devices and related accessories; bargain books; magazines; gifts; café products and services; educational toys and games; music; and movies. It also sells textbooks and course-related materials, emblematic apparel and gifts, school and dorm supplies, and convenience and café items in college and university campuses.

In addition, the company provides new and used textbooks, as well as textbook rental services; and electronic textbooks and other course materials through NOOK Study, a proprietary digital platform and a software solution for higher education. Barnes & Noble, Inc. sells its products directly to customers through its bookstores and on barnesandnoble.com. As of June 25, 2013, the company operated 675 Barnes & Noble stores, as well as 686 college stores serving students and faculty members at colleges and universities. 

For sometimes. the company founder had offered to take the company private and that had offered a floor under share prices. However, he pulled out of the deal earlier in the week pushing shares into a bearish "flag." Lower share priices are expected for this stock.

52-Week Trading Range:  $11.17 - $23.71

Entry Point:  $14.50

Here is the trade:

Buy one September $15 Put contract for less than $1.00

Trade

  • Buy 1 September $15.00 Put at $1.00
  • For a net debit of $1.00

Profit/Loss Analysis

  • Breakeven at $14.00
  • Maximum profit is unbounded
  • Maximum loss is ($100.00) at strike of $15.00

Closing Summary

  • Sold 1 September $15.00 Put at $1.50

Position closed on 8/30/2013 at price of $1.50 with a 50.00% gain in 7 days.

Updates

8/30/2013 12:13:41 PM

We are closing BKS put option at $1.50

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