The bookseller is evaluating cutting costs such as college fees
The shares of Barnes & Noble Education Inc (NYSE:BNED) are up 8.2% at $5.51 at last check, after CFO Thomas Donohue told the Wall Street Journal another semester of remote learning will likely lead to more cost-cutting initiatives, as the bookseller is forced to keep campus outlets closed due to COVID-19. And while Donohue doesn't anticipate more workforce reductions, he is evaluating costs such as fees the company pays to colleges.
Barnes & Noble stock has been steadily climbing up the charts after dropping to an April 3 all-time-low of $1.11. A number of bull gaps in early November and December culminated in a Dec. 28, annual high of $5.83, with support along the way from the 20-day moving average. Year-over-year, BNED sports a 28.8% lead.
The security's usually quiet options pits are brimming with activity today. Amid low absolute volume, 390 calls and 68 puts have crossed the tape so far -- four times the intraday average. The most popular is the January 2021 7.50-strike call, followed by the 5-strike call in the same series, with new positions currently being opened at the former.
Now seems like a good time to take advantage of BNED's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 71% sits in the extremely low 3rd percentile of its annual range. In other words, the equity sports attractively priced premiums at the moment.