One investor apparently believes that Ann options are overpriced
ahead of its earnings report tomorrow morning.
in the stock is about 63 percent, one day before the women's
apparel retailer announces quarterly results. That's a high level
compared with its 42 percent
is a common way to exploit such an elevated premium, and that's
what is occurring at the November 25 strike today. More than 5,000
contracts have traded, first for $1.10 but then for as little as
$0.80 as the selling drove prices lower.
If the news is good tomorrow and ANN stays above $25, those puts
will expire worthless. Below that level, they will be required to
buy shares at the strike price. (See our
ANN is up 1.45 percent to $25.27 in afternoon trading amid sharp
losses in the broader market, continuing to grind higher since the
S&P 500 crashed in over the summer. Its last earnings report on
Aug. 19 beat expectations on the top and bottom lines, and
management raised full-year guidance.
Overall option volume in the stock is 10 times greater than average
so far today.
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