Bull looks for rebound in Jones

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Jones Group is down hard today, but one trader is keeping the faith.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,200 February 14 calls for $1.03 and the sale of an equal number of February 16 calls for $0.28. Volume was below open interest at the higher strike, so there are two possible explanations of the trade.

One is that the investor previously owned the 16s in hope of a rally and rolled the long-call position lower after shares dropped. That way they have more leverage to a rebound because they're now closer to the money and have a higher delta .

Alternately, both halves of the trade may have been opened, in which case it was a bullish call spread with the potential to earn 167 percent from a move to $16. Either way, they paid $0.75. (See our Education section)

JNY is down 8.82 percent to $13.86 in afternoon trading after Women's Wear Daily reported that G-III Apparel Group has abandoned an effort to buy the company's clothing division. That story drove the stock back below its 200-day moving average for the first time since early March.

Overall option volume is 6 times greater than average so far today, according to the Heat Seeker. Calls account for a bullish 84 percent of the total.




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: JNY

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