Ralph Lauren is stalling near last year's highs, and the bears
optionMONSTER's Depth Charge monitoring program detected the
purchase of some 2,200 May 170 puts for about $1.68. A matching
number of May 180 calls was sold at the same time for about $1.28.
Volume was more than triple the previous open interest at each
strike, indicating that new positions were initiated.
Known as a
, the strategy cost some $0.40 and will profit from the fashion
company declining in the next three weeks. The position also
obligates traders to sell the stock for $180 if rallies above that
level, so they probably own it already and are using the options to
protect against a drop. (See our
section for other hedging techniques.)
RL is up 0.11 percent to $175.80 in morning trading. It's currently
parked around the same level where it peaked in March 2012, which
could be leading some chart watchers to think that it's at
The company hasn't yet indicated when fourth-quarter earnings will
be announced, but last year it occurred on May 22. If they follow a
similar schedule this year, the release will fall after the May
Total option volume is 6 times greater than average so far today,
according to the Depth Charge.
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