Coach has seen its share price cut in half in the last year, but
the bears still aren't done with the retailer.
optionMONSTER's Depth Charge monitoring program yesterday detected
the purchase of 18,000 January 31 puts for $1.80 and the sale of an
equal number of January 35 puts for $3.80. Volume was below
previous open interest at the higher strike, which suggests that an
existing position was closed and rolled lower.
Puts lock in the price where a stock can be sold, so they increase
in value when shares fall. They can be used to
hedge long positions
or to speculate on a drop. In yesterday's case, the trader
recovered $2 of his or her capital and will profit from
further declines. (See our
COH rose 0.6 percent to $33.79 yesterday but has fallen steadily
from its 52-week high of $59.58 last July. The seller of women's
accessories has been plagued by weak sales and increased
competition in its core North American market. The stock is
attempting to hold lows from mid-2010, which could make some chart
watchers expect even greater losses if support is broken.
The company's next earnings report is scheduled for Aug. 5 before
the opening bell.
Yesterday's overall option volume in the name was quadruple its
daily average, according to the Depth Charge. Puts accounted for a
bearish two-thirds of the total.
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