One investor is using puts to navigate a trade in Vera Bradley.
optionMONSTER's tracking systems detected the sale of more than
3,200 May 30 puts for $2.30 and $2.35. Volume was more than 20
times open interest in the strike.
VRA fell 1.28 percent to $29.42 yesterday. The maker of women's
bags and accessories, known for its floral designs, is down more
than 20 percent so far this month but is attempting to hold the
same $28.50 level where it bounced in December.
The investor is now on the hook to buy shares for $30 if they close
below that level on expiration. Including the credit earned, their
entry price would be $27.65 to $27.70 -- a healthy margin below
The strategy takes advantage of the time value in the puts, using
it to cushion against fluctuations in the near term. That spares
the investor the difficulty of picking a bottom in the stock. And,
if it closes above $30 on expiration, they will keep the premium
without buying shares. See our
Overall options volume in VRA was 11 times greater than average in