Michael Kors has pulled back recently, and a large trader is apparently confident that level will hold as support.
optionMONSTER's tracking programs detected the sale of 11,500 July 90 puts for $3.30 and the purchase of an equal number of June 90 puts for $1.55. Volume was below open interest in the nearer-dated contracts, which suggests that an existing short position was closed and rolled forward in time.
Selling puts generates income while obligating the investor to buy shares in the fashion retailer at a lower level. He or she probably sold the June 90s, which expire at the end of today's session, at an earlier date and added a month to the trade. Making the adjustment prevents the trader from having to get long the stock at $90 while also generating a credit of $1.75. (See our Education section)
KORS fell 1.46 percent to $89.36 yesterday. It surged almost 300 percent between December 2011, when the stock went public, and February 2014. The shares have been consolidating since and held support around $90 in recent sessions.
Total option volume in the name was quadruple its daily average yesterday.
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