Market News

October 29, 2013  Tue 4:45 AM CT

Some traders are positioning for a potential drop in Crox, which reports earnings tomorrow.

About 2,100 March 13 puts were bought yesterday for $1.35 to $1.44 yesterday, according to optionMONSTER's Depth Charge tracking system. The volume was well above the strike's previous open interest of 413 contracts, indicating new activity.

These puts lock in the price where traders can sell the stock through mid-March no matter how far it might fall. They could have been purchased to hedge a long position or to make an outright bearish bet. (See our Education section)

CROX fell 4.75 percent yesterday to close at $13.03 after a Piper Jaffray analyst downgraded the name to "neutral" from "overweight" and cut its price target to $15 from $18.

The footwear company gapped down from the $17 level on July 25 after its last quarterly release and has been range-bound since then, tracking its 50-day moving average since early October. Management is scheduled to release third-quarter results tomorrow after the closing bell.

Total option volume in the name topped 8,200 yesterday, 13 times its daily average for the last month. Puts made up 66 percent of those contracts.
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