Optical retailer National Vision Holdings (EYE) is down 33% over the past year, but shares have started to rally higher in recent sessions. One trader sees that uptrend continuing over the coming weeks.
That’s based on the December 20, 2024 $12.50 calls. With 43 days until expiration, 10,039 contracts traded compared to a prior open interest of 173, for a 58-fold rise in volume on the trade. The buyer of the calls paid $1.05 to make the bullish bet.
National Vision Holdings recently traded for just over $12, making this an at-the-money trade. The strike price is about half the stock’s 52-week high price of $24.11.
National Vision has struggled over the past year. Revenues rose nearly 5%, but earnings growth was negative, leading to overall losses.
However, shares now trade at about 0.4 times their price to sales, indicating a relative value here.
Action to take: While operations are lackluster, the start of a new uptrend should bode well for momentum investors who buy here. Shares are far enough off their highs to see double-digit returns in the months ahead.
For traders, the December $12.50 calls could see high double-digit returns from further gains in shares. More aggressive traders may want to use a higher strike price. The December $15 calls, trade for about $0.35, and could see a higher percentage return from a further uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.