How one trader is playing Lululemon
Chris McKhann | firstname.lastname@example.org
LULU is up 1.08 percent to trade at $71.42 in early afternoon trading. Shares of the women's athletic-apparel company were at an all-time high of $81.09 a month ago.
optionMONSTER systems show that 10,000 each of the June 67.50 and 60 puts have traded, with open interest around 3,500 in each strike. Big blocks of 8,701 changed hands for $1.81 and $0.51 respectively. The 67.50 puts appear to have been sold and the 60s bought, creating a credit spread.
That spread would take in a credit of $1.30, which will be the profit if LULU remains above $67.50 through expiration. The position risks losing $6.20 if the stock is at or below $60 at that time, but those options have just over a week to trade and the stock was last at $60 in late January. (See our Education section)
Nearly 39,000 options have already traded in LULU today, compared with its daily average of 6,500.