Credit: Shutterstock photoFirst they sold puts on Avon Products, and now they're buying calls.
optionMONSTER's Heat Seeker tracking system detected the purchase of about 10,000 January 22.50 calls on the cosmetics company, most of which priced for $1.55. Volume was 56 times greater than average in the strike. The activity came three days after an investor wrote protection, betting the stock was done falling. (See our Education section)
AVP rose 0.57 percent to $21.12 on Friday and is attempting to lift itself from its lowest price since April 2009.
The company has been focusing on Latin America, pouring money into new distribution facilities in Colombia and Brazil. The region accounted for almost half its revenue and most of its growth in the last quarter. The company is also expanding aggressively in Africa.
CEO Andrea Jung said on July 28 that profitability will improve in the second half as the benefit of investments are realized. Some investors may also be attracted to the stock's 4.4 percent dividend yield.
Overall options volume in the stock was triple the daily average on Friday, with calls outnumbering puts by 12 to 1, according to the Heat Seeker.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
