Coach faces large bearish position

By
A A A

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 Education section)

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.




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: COH

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

85%

Most Active by Volume

100,376,898
  • $17.62 ▲ 0.51%
83,231,837
  • $25.62 ▲ 1.91%
75,739,329
  • $111.78 ▼ 0.77%
65,297,937
  • $36.37 ▼ 1.76%
59,053,093
  • $47.66 ▲ 0.29%
53,482,350
  • $2.59 ▼ 0.38%
51,504,284
  • $7.34 ▲ 2.37%
51,434,656
  • $8.14 ▲ 6.96%
As of 12/19/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com