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November 11, 2013  Mon 2:45 AM CT

URBN: SEE CHART GET CHAIN FIND STRATEGIES
A call spread is looking for more upside in Urban Outfitters

optionMONSTER systems show that 4,500 of the November 39 calls were bought for their ask price of $0.55. At the same time, 9,000 November 40 calls were sold for the bid price of $0.10. Volume was multiples of previous open interest at each strike, clearly indicating new activity.

This ratio spread cost the trader $0.35, which is the maximum amount at risk if URBN falls below $39. The maximum gain would be realized with URBN at $40 upon expiration at the end of this week. Above that the trader faces the risk of having to sell shares. (See our Education section)

URBN was up 2.63 percent to $39.48 on Friday, its highest close since early September, when shares gapped down from above $42 on disappointing guidance for same-store sales. The apparel retailer hit a low of $35 a month ago.

Total option volume in the name topped 19,800 contracts on Friday, 12 times its daily average for the last month. Overall calls outnumbered puts by 9 to 1.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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