Someone thinks that 13 is an unlucky number for Fifth &
That's the level where one investor chose to sell about 5,000
January calls yesterday, according to optionMONSTER's tracking
programs. They priced for $0.55 and $0.50, and volume was more than
twice previous open interest at the strike.
The trader is now obligated to sell shares in the apparel company
for $13 if they close above that level on expiration in
mid-January. He or she probably owns stock and wrote the contracts
to help manage risk in a
strategy. (See our
FNP rose 1.28 percent to $12.70 yesterday and is now back near the
same level where it gapped lower after cutting its guidance in
early October. That could be leading some traders to believe that
it will face resistance, helping explain the call sale.
The investor is essentially betting that the stock will remain
below about $13.50 through expiration, which would be the effective
price if it closes above $13. (The $13 strike price plus the $0.50
credit earned from selling the calls.)
FNP, which changed its name from Liz Claiborne in May, has been
repositioning itself around its Juicy Couture, Lucky Brand, and
Kate Spade lines.
The call selling pushed total option volume to 14 times greater
than average in yesterday's session.
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.
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