Speaking on Bloomberg Markets, Scott Bauer, the CEO of Prosper Trading Academy, suggested a bullish options trade in Big Lots, Inc. BIG.
The company is going to report earnings Friday and Bauer is optimistic because of the recent analyst upgrades. He added that the stock is approaching the important support and its price to earnings ratio is way lower than the industry.
To make a bullish bet, Bauer wants to buy the March 57.50/60 call spread for $65 cents. The trade breaks even at $58.15 or 6.7 percent above the current market price. If the stock closes at or above $60 at the March expiration, the trade is going to reach its maximal profit of $1.85.
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