Trade of the Day: Best Buy Co Inc (BBY)

To receive further updates on this Best Buy Co Inc (NYSE:BBY) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of SlingShot Trader today

Sears Holdings Corp (NASDAQ:SHLD) announced Thursday that the company would start selling its well-known Kenmore brand appliances through Amazon.com, Inc. (NASDAQ:AMZN). This is a significant shift in strategy, although it was probably an inevitability. The news hit home-improvement and appliance-resellers like Home Depot Inc (NYSE:HD), Lowe’s Companies, Inc. (NYSE:LOW) and Best Buy Co Inc (NYSE:BBY).

We like the opportunity to profit from a bearish move in BBY for two reasons. First, the stock will be under margin pressure in its appliance business, and it appears that AMZN is building a services arm to compete with BBY’s “Geek Squad.” Services revenue at BBY is already being hammered by low customer satisfaction, and this news is likely to have an additional bearish impact on the company.

‘Buy to open’ the BBY August 52.50 Puts (BBY170818P00052500) for a maximum price of $1.20.

Follow our Facebook page to receive each Trade of the Day direct to your News Feed — and join the conversation.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

Most recently, John and Wade are co-options strategists of Turbo Trader Live — a live, interactive trading room service that runs two hours every trading day the market is open. Turbo Trader Live focuses on long call and put options, as well as long and short vertical spread strategies. Find out how to get in on the live trading action and start making real profits by clicking here.


Article printed from InvestorPlace Media, https://investorplace.com/2017/07/trade-of-the-day-best-buy-co-inc-bby/.

©2021 InvestorPlace Media, LLC