Ann has pulled back to a potential support level, and one bull
is getting long for cheap.
optionMONSTER's Heat Seeker tracking system detected the purchase
of 4,000 July 29 calls for $0.55 and the sale of an equal number of
July 24 puts for $0.40. Volume was more than triple open interest
in both strikes.
The trade resulted in a net cost of $0.15 and will generate
significant leverage if the apparel stock rallies toward or above
$29 in the near term. It will also lose money to the downside and
expire worthless if the shares remain between $24 and $29 by July
ANN fell 0.59 percent to $26.84 in morning trading, returning to a
price area where it peaked in late 2010 and consolidated again in
March after gapping higher. Some chart watchers may now expect it
to bounce at this level, continuing an uptrend that has been in
place since the S&P 500 bottomed out more than two years ago.
The shares were most recently the target of call sellers on May 20,
who looked for them to remain below about $29.50 through June
expiration. ANN is in the process of opening new stores and has
told investors that margins will suffer in the short term as a
Today's bullish trade pushed overall option volume in the name to
more than twice the average amount so far today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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