BBBY - Options traders expect another 10% upside for Bed Bath & Beyond

• Bed Bath & Beyond ( NASDAQ: BBBY ) shares have continued yesterday's surge, rising as much as 27% in premarket trading, as investors shrug off the troubled retailer's disappointing fiscal third-quarter results .
• The home-goods retailer reported wider-than-expected loss for the quarter, with comparable sales down 32%. In a bid to cut costs, the company also begun a fresh round of layoffs , according to CNBC.
• Options traders are seeing the latest round of layoffs as a step in the right direction, with Bed Bath's ( BBBY ) trading at 3x average daily volume on Tuesday, according to Optimize Advisors' Mike Khouw. Traders expect the company shares to be up by at least another 10% by Friday.
• In the short term, experts are closely looking at the firm's ability to pay interest payments, due on three tranches of debt, on Feb 01. If the firm fails to do so, it will likely be headed for a bankruptcy filing.
• The meme stock has a huge short interest at ~33%. Shares were up as much as 27% in Wednesday's premarket session, but have dipped 84% over the past year.

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