Tiffany's been dropping for weeks, and option traders are positioned for an even deeper plunge.
optionMONSTER's Depth Charge program showed a block of 10,000 June 57.50 puts bought in the iconic jeweler yesterday for $2.30. Volume was more than 4 times previous open interest in the strike.
TIF fell 1.36 percent to $56.59, so those puts are in the money. These options will closely track the stock, but in the opposite direction--profiting to the downside and losing money if it rises or doesn't move. (See our Education section)
Shares hit a new 52-week low after the company's earnings report last week and are now at a support level that goes back to October 2010. Yesterday's option action shows that there is clearly a belief that Tiffany's could break this support and go even lower.
More than 13,000 contracts traded overall in the name, over twice its daily average. Puts outnumbered calls by 7 to 1.
(A version of this post appeared on InsideOptions Pro yesterday.)
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