Market News

November 29, 2016  Tue 6:16 AM CT

A trader is extending a bearish position in American Eagle Outfitter ahead of quarterly results tomorrow afternoon.

OptionMonster's market scanner shows that 3,000 December 19 puts were sold for $1.20 while 3,000 January 19 puts were purchased for $1.55 yesterday. Volume was below open interest in the December contracts, indicating that a bullish trade was rolled forward by a month.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

AEO rose 0.33 percent to $18.40 yesterday and is up 7 percent in the last month. The next quarterly report is scheduled for pre-market hours on Nov. 30. The fashion retailer is scheduled to report earnings after the market closes tomorrow.

Overall option volume was 6 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 3-to-1 ratio.

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