At least one trader apparently thinks that Ralph Lauren is the comeback kid.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,300 April 140 calls, most of which priced for $1.60. Volume surpassed previous open interest of 2,064 contracts, which indicates new money was put to work.
The investor now has the right to buy shares in the apparel stock for $140 through expiration, no matter how high they may be at the time. That will prevent them from missing a rally while limiting the amount of capital at risk if it drops. Given the cheap cost of the long calls , it would take a move of only about 2 percent for them to double their money. (See our Education section)
RL is up 1.27 percent to $139.57 in afternoon trading. The clothing retailer peaked near $190 late last year, slid lower in January, cratered on a poor earnings report in February, and fell all the way under $130 by mid-March. The stock has been working its way higher since and is now pushing back against its 50-day moving average.
The strong dollar weighed on results last quarter, but investors might think that's now less of a problem as the euro and other currencies rebound.
Total option volume in the name is more than triple its daily average so far today, with calls outnumbering puts by a bullish 15-to-1 ratio.
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