Market News

October 18, 2016  Tue 7:47 AM CT

Skechers USA has plunged in recent months, and one short-term trade is positioning for even more declines.

optionMONSTER's monitoring system shows that 2,500 Weekly 21.50 puts expiring on Oct. 28 were purchased in one print for $1.05 yesterday. This is clearly a new position, as open interest in the strike was a mere 73 contracts before the trade occurred.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

SKX fell 3.11 percent to $22.12 yesterday and is down 30 percent in the last three months. The shoe retailer's next quarterly report is scheduled for after the close on Oct. 20.

Overall option volume in the name was twice its daily average yesterday. Puts outnumbered calls by a bearish 4-to-1 ratio.

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