One investor wants to make some fast cash in Urban Outfitters.
optionMONSTER's tracking systems detected the sale of about 2,100
September 39 puts for $0.57 and the purchase of roughly the same
number of September 38 puts for $0.32. Volume was more than twice
open interest at both strikes.
The trader collected a credit of $0.25, which they'll get to keep
if the retail stock closes above $39 at the end of next week. They
most they stand to lose is $0.75, which would result from a close
at or below $38.
Known as a
put credit spread
, the strategy is designed to capitalize on the quickening pace of
as expiration approaches. It also reflects confidence that the
shares won't decline. (See our
section for other
trades that make money from the passage of time rather than a
URBN rose 1.94 percent to $39.48 yesterday and is up 29 percent in
the last month. Most of that gain came after Aug. 20, when
quarterly earnings and revenue beat expectations thanks to a better
product mix. Shares are now back to the same level where they have
peaked several times since April 2010.
The credit spread pushed total option volume to almost twice the
daily average in the session.
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