) -- Although there wasn't any notable news Friday from



, one investor boosted options activity on a bet that the supermarket chain's stock is range-bound.

An investor sold 6,000 Jan. 20 straddles at $2.50 per spread with the stock trading around $19.50. This translates to an implied volatility of 28, compared with a 63-day realized volatility of 63.

The in-the-money Jan. 20 puts, currently trading down 20 cents, are home to current open interest of 7,871 contracts, and the out-of-the-money Jan. 20 calls, currently trading up 10 cents, are home to current open interest of 7,070 contracts, according to's Sidewinder report.

SWY shares are up 30 cents so far on the day to $19.50. This straddle seller is betting on volatility to slow and time decay to kick in throughout the next four months and for the stock to remain in a range to make money.

The investor needs SWY shares to expire between $17.50 and $22.50 (the break-even prices of the straddle), and can make a maximum profit of $2.50 per spread (the premium collected today, minus opening commissions).

One other thing to note is that because this investor is selling the 20 strike, which is slightly out-of-the-money to the upside, the investor makes the most money if the stock rallies slightly. So this straddle sale is slightly bullish.

It's also important to note that SWY is still more than 15% off its highs of this year that were reached back in January. Given how SWY has underperformed the broader market this year, the investor could be betting not only on a decline in implied volatility, but a slight rally in the shares to get back some of the underperformance.

-- Written by Jud Pyle in Chicago

Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."