Traders taking profits in Ann after rally

By David Russell,

Shutterstock photo

Ann has rallied back to a key level, and one investor is taking profits in the women's apparel retailer.

optionMONSTER's tracking systems detected the sale of about 3,300 May 31 calls for $0.55. Volume was more than 20 times open interest in the strike.

ANN is up 1.66 percent to $29.33 in early afternoon trading and is up 27 percent since early February. The shares have been stalling around the same price area where they gapped lower in May 2011, which could lead some chart watchers to believe that it will now become resistance.

Writing those calls obligates the investor to sell shares for $31 if they're above that level on expiration. Including the credit earned, their exit price would be $31.55. He or she is probably using the options to manage a long position in the name.

More than 3,800 contracts have traded so far in ANN, triple the daily average.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: ANN

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