Retailers and related stocks continue to fight back from major
selloffs, and yesterday the bulls were shopping at Coach.
optionMONSTER's Heat Seeker syste detected unusual activity in the
afternoon, starting with the purchase of more than 1,800 Weekly
38.50 calls expiring on Sept. 26 for $0.25. A few minutes later
they turned to the February 41s in much larger numbers, snapping up
more than 10,000 of those contracts for $1.20 and $1.25.
Volume was more than 28 times open interest at both strikes, which
indicates new money was put to work. The unusual activity was cited
by optionMONSTER co-founder Jon "DRJ" Najarian on CNBC's "
" program after the close.
lock in the price where investors can buy a stock, letting them
position for gains at limited cost. They can also generate
significant leverage if a rally unfolds, but the contracts can lose
value on a pullback. (See our
COH rose 2.05 percent to $37.27 yesterday. The luxury-accessories
retailer lost more than 30 percent of its value early this year,
cratering along with other consumer-discretionary names after a
poor holiday season. But the stock rebounded after a strong
quarterly report on Aug. 5 and is now back above its 50-day moving
Total option volume in Coach was 6 times greater than average in
the session, with calls outnumbering puts by a bullish 8-to-1
Najarian is long COH.
(A version of this post appeared on
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