JMBA – Jamba, Inc. – Shares in the operator of Jamba Juice stores dropped more than 20% to $10.45 on Tuesday morning after the company lowered several of its estimates for 2013, citing a slowdown in consumer spending, adverse weather in key markets and increased competition, according to a press release available on Jamba’s investor relations site. The stock was cut to ‘Market Perform’ from ‘Outperform’ with a 12-month price target of $12.00 at Northland Securities and was lowered to ‘Neutral’ from ‘Buy’ at Dougherty & Co. today.
Options volume on the stock is up sharply today, with around 2,300 contracts in play versus average daily options volume of around 130 contracts. Trading in JMBA puts is outpacing that of calls, with the put/call ratio hovering around 2.2 as of 11:45 a.m. ET. Traders positioning for shares in the smoothie and juice retailer to extend declines during the next few months snapped up put options across several expiries this morning. Near-term bears purchased around 200 of the Oct $10 strike puts for an average premium of $0.14 each, and may profit at expiration next week if shares in JMBA decline 5.5% from today’s low of $10.45 to breach the average breakeven point on the downside at $9.86.
Meanwhile, traders looking ahead several months picked up 480 of the Jan 2014 $10 strike puts for a premium of $0.80 apiece. Buyers of these contracts stand ready to profit in the event that JMBA shares decline another 12% to settle below the breakeven price of $9.20 by expiration next year.
