Ann has been sliding for months, but buyers are finally showing
Option activity was quiet in the name for most of Friday's session,
but then a flurry of call buying hit less than 15 minutes before
the close. Our Heat Seeker tracking system showed the volume
focusing on the March 28 calls, with about 2,400 bought in volume
well above the strike's previous open interest of just 559
About 1,000 March 27 calls were bought shortly thereafter. The
March 28 contracts mostly priced for $1.40, while the 27s fetched
$2.10 to $2.30.
fix prices where shares can be purchased in the next two weeks.
That will provide significant leverage if ANN rallies, but they can
also become worthless from a modest decline in the stock price.
ANN rose 0.46 percent to $28.42 on Friday after fighting its way
into positive territory when the calls traded. Given the timing and
the heavy volume, it appears that at least one large investor was
building a position in the women's apparel retailer.
The stock exploded higher in August after quarterly results beat
estimates. The next report in November was also strong, but
management lowered its outlook early last month because of
Hurricane Sandy and as customers shunned new fashions at its Loft
Shares have now returned to the same level where they traded before
the August rally. That could be leading some investors to think
that the stock is cheap and want to get long before the next
report, scheduled for Friday morning.
Total option volume was 6 times greater than average in the name,
with calls outnumbering puts by about 9 to 1.