Retail Stock Could Be Ready to Burn Options Bears

Retail staple Macy's Inc (NYSE:M) stock is 0.6% higher to trade at $17.92 at last glance. When we last covered Macy's three weeks ago, the equity had cleared a key trendline. Despite spending the next 21 days winding around it while nursing a 18.5% deficit in 2026, a contrarian sentiment signal is sounding in M's options pits for the next few weeks.

Macy's 10-day buy-to-open put/call ratio just hit the 90th percentile and crossed over 1.0. According to Schaeffer's Senior Quantitative Analyst Rocky White, in the last three years that’s occurred three other times. The stock has averaged a 10.8% return 21 days later with a 67% success rate.

A move of similar magnitude would have M testing the upper rail of a consolidation pattern formed in March. Longer term, shares are 57.6% higher in the last 12 months. A short squeeze could help the equity rally as well. Short interest has increased by 11.1% in the most recent reporting period, and the 26.66 million shares sold short account for 10.2% of M's total available float.

Options premium is affordably priced. M's Schaeffer's Volatility Index (SVI) of 42% ranks in the 7th percentile of its annual range, indicating options traders are currently pricing in unusually low volatility expectations.