Children's Place draws upside play
Chris McKhann | [email protected]
Just shy of 8,000 PLCE options changed hands in total yesterday, compared to an average daily volume of less than 1,000. A trader bought 1,750 December 55 calls for the ask price of $2.20 and, seconds later, sold 3,500 December 60 calls for the bid price of $0.65.
This ratio spread cost the trader just $0.90, which is the most that can be lost if PLCE remains below $50. The maximum gain comes if the stock is right at $60 upon expiration in mid-December but, above that, the trader is effectively short shares. (See our Education section)
PLCE was almost 1 percent yesterday to close at $54.49, in the middle of its recent range. The children's apparel retailer was up at $56 at the end of October and at resistance at $58 at the start of that month.