Options Trading News

November 8, 2013  Fri 11:33 AM CT

Jones Group is down hard today, but one trader is keeping the faith.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 1,200 February 14 calls for $1.03 and the sale of an equal number of February 16 calls for $0.28. Volume was below open interest at the higher strike, so there are two possible explanations of the trade.

One is that the investor previously owned the 16s in hope of a rally and rolled the long-call position lower after shares dropped. That way they have more leverage to a rebound because they're now closer to the money and have a higher delta.

Alternately, both halves of the trade may have been opened, in which case it was a bullish call spread with the potential to earn 167 percent from a move to $16. Either way, they paid $0.75. (See our Education section)

JNY is down 8.82 percent to $13.86 in afternoon trading after Women's Wear Daily reported that G-III Apparel Group has abandoned an effort to buy the company's clothing division. That story drove the stock back below its 200-day moving average for the first time since early March.

Overall option volume is 6 times greater than average so far today, according to the Heat Seeker. Calls account for a bullish 84 percent of the total.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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