Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Home Depot, Inc. (HD) Short Sellers Got Knocked Out by Earnings, Guidance Combo

The Home Depot, Inc. (NYSE:HD) proved a rather unwelcoming home for short sellers this year, who predicted the stock would take a dive on continued weakness in the retail and housing sectors. On CNBC on Friday, some of the Options Action traders, including Michael Khouw, Managing Director and Chief Strategist at DASH Financial, discussed their plight involving their attempts to short the stock, and the involvement of put options in the transaction.

The Home Depot, Inc. (NYSE:HD)

“I mean the jab was the beat on earnings and the guide higher was the hook that knocked us out. I mean that’s not really what you want to see, that’s not consistent with the bearish thesis that we had. There isn’t a whole lot of premium so the whole idea here is we’ll take a look and see how these things trade next week and possibly if the market pulls back and there’s a little premium, I’d actually just sell them and take what’s left and move on,” Khouw said.

The Home Depot, Inc. (NYSE:HD) began trending upwards again from the middle of May onward, and soared in the middle of August on the strength of several sets of positive news. Among them was the data that home building confidence was at a seven month high, as well as The Home Depot, Inc. (NYSE:HD)’s own positive results, which included earnings that beat estimates and jumped 5.7% from the year prior, allowing them to raise their full-year guidance in the process. Despite the The Home Depot, Inc. (NYSE:HD)’s recent scandal over a data breach that may end up being one of the biggest in retail history, their stock is still up 6.67% for the month, and 14.35% for the prior three months.

According to the CNBC analysis, their short of 100 shares of The Home Depot, Inc. (NYSE:HD) amounted to a $1,200 setback given the stock’s rise in value over the past few months, while a put option on the stock from May 16 which was exercised limited the damages to $340.

Disclosure: none

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!