Abercrombie bears back for more

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The bears are coming back to Abercrombie & Fitch.

Earlier this week optionMONSTER's systems identified saw heavy activity in the November 70 and 60 puts as an investor looked for the teen apparel stock to push toward the lower strike. That same activity continues today as about 10,000 November 70s were bought for $4.25 to $4.28 and an equal number of November 60s were sold for about $1.02.

Between the two days of activity, there now appears to be about 19,000 contracts of open interest in both strikes.

Today's put spread uses income from the lower strike to finance owning those that are closer to the money. In the case of today's trade, it can earn a maximum profit of about 200 percent. (See our Education section)

ANF is up 1.25 percent to $70.56 today and has been fluctuating in a range for the last six months. It bounced around $60 several times since August, and the recent put buyers seem to expect a return to that level.

Overall option volume is triple the daily average so far today, with puts outnumbering calls by 13 to 1.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: ANF

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As of 9/19/2014, 04:15 PM

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