Ann surged on strong earnings earlier in March, but one big
investor wants out.
optionMONSTER's tracking systems detected the sale of 20,000
April 26 calls for $1.75 against open interest of 374 contracts.
The trade accounted for most of the activity in the apparel
company, which recently changed its name from AnnTaylor.
ANN rose 2.33 percent to $27.64 yesterday. It reported
better-than-expected results for the fiscal fourth quarter on
March 11. Management also forecast a strong first quarter and
said it would increase its stock buyback program.
The shares gapped higher on that news and have fluctuated between
$26 and $28 ever since. Thursday's call sale reflects a belief
they're likely to remain in this range or decline in coming
ANN fell as soon as the options traded, likely the result of
hedging by the market maker who bought the calls and wanted to
offset his or her long exposure.
The investor who wrote the calls is now obligated to sell ANN for
$26 if it closes at or above that level on expiration. Including
the credit they brought in, that translates into an exit price of
$27.75. See our Education Section for more.
Overall options volume in the name was 21 times greater than
average in the session.
(Chart courtesy of tradeMONSTER)
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