Options Trading News

June 25, 2013  Tue 12:20 PM CT

At least one trader is turning bullish on Jos. A. Bank Clothiers as its shares attempt to rebound.

optionMONSTER's Heat Seeker system detected the purchase of 1,840 August 40 calls in less than a minute today, led by a print of 1,617 that went for $2.75. This is clearly a new position, as the strike's open interest was a mere 12 contracts before the trade appeared.

These long calls, which lock in the purchase price for the stock, will track the share price closely because they are in the money. They are looking for JOSB to rise above $42.75 by expiration in mid-August but will rapidly lose value if the shares don't advance in coming weeks. (See our Education section)

JOSB is up 3.45 percent to $41.12 this afternoon after bouncing at the $39 last week, but it is still down more than 15 percent in the last month. The men's apparel retailer set off speculation about potential acquisitions after saying Friday that is is exploring "strategic opportunities." That same day, investors voted to reject the compensation package of CEO R. Neal Black and other senior executives in what was reportedly a contentious shareholder meeting.

Total option volume in the name so far today is already more than 5.5 times its full-session average. Calls outnumber puts by a bullish 20-to-1 ratio.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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