Options Trading News

January 17, 2013  Thu 9:27 AM CT

Traders are looking for gains in Avon Products as its shares try to recover from a steep drop last year.

optionMONSTER's Heat Seeker system detected the purchase of 1,317 April 19 calls for $0.35 at the same second this morning. The volume was above the strike's open interest before today's trading began, indicating that this is fresh buying.

AVP is off 0.41 percent to $15.94 today. The cosmetics icon gapped up from the $14 level at the end of December and is now facing resistance at $16, not far below its 200-day moving average.

Shares plunged from 52-week highs above $23 last April as the company became mired in negative news ranging from poor quarterly results to bribery charges. Management is scheduled to release fourth-quarter and full-year earnings on Feb. 12 before the market opens.

The calls purchased today, which lock in the price where the stock can be bought, are looking for AVP to gain roughly 21 percent or more by mid-April. These options could be sold at a profit earlier if their premiums rise with any rally before then, but they will expire worthless if the shares don't move. (See our Education section)

Avon has frequently appeared on optionMONSTER's scanners, most recently last month with buying in the January 16 calls that expire tomorrow. Overall calls in the name outnumber puts by nearly 3 to 1 so far today.
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