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Big Lots Stock Shocks Shorts With Post-Earnings Bull Gap

Short sellers have ramped up their exposure to the retail stock

Managing Editor
Mar 8, 2019 at 10:11 AM
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Shares of Big Lots, Inc. (NYSE:BIG) are higher this morning, after the retail chain announced better-than-expected fourth-quarter earnings and same-store sales. CEO Bruce Thorn described a "meaningful sales acceleration in December and January" as the driver behind the impressive numbers. In response, BIG is up 10.1% at $35.06 in today's trading. 

Long term, Big Lots stock has struggled to gain momentum, with troubles exacerbated by its Dec. 7 post-earnings bear gap. With today's surge, however, the shares are on pace to close above their 80-day moving average for the first time since Dec. 3, and have pushed their year-to-date gain up to 21.3%.

Diving into options sentiment, Big Lots sports a Schaeffer's put/call open interest ratio (SOIR) of 3.50, indicating that put open interest nearly quadruples call open interest among options expiring within three months. This ratio is in the 72nd percentile of its annual range, suggesting near-term options traders have rarely been more put-biased in the past year.

Elsewhere, short sellers have been ramping up coverage on BIG, with the stock seeing a 29% increase during the most recent reporting period. These bearish bets now account for 20.7% of the stock's total available float, or 8.7 times the average daily pace of trading.

 

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