OptionsHouse

Options Trading News

August 20, 2012  Mon 9:36 AM CT

ANF: SEE CHART GET CHAIN FIND STRATEGIES
Abercrombie & Fitch has been the rise, and one investor is looking for the gains to continue.

Today's option activity is dominated by a three-way combination in the September expiration. It entailed the purchase of 5,000 of the September 37 calls for $1.10, while 5,000 of the September 40 calls were sold for $0.34 and 5,000 of the September 32 puts were sold for $0.52.

ANF declined 0.75 percent to $35.66 in morning trading. The retail stock gapped down to a three-year low of $28.64 at the start of the month, but has regained that ground amid earnings. Shares are still down by more than 50 percent from late October.

The combination strategy is a bet that ANF will trade up to $40, but not much beyond, and that it won’t see much downside beyond $32. The total trade costs $0.24, which will be lost if the stock remains between $32 and $37. The maximum gain comes at or above $40.

Overall option volume is almost quadruple the daily average so far in the session.
Share this article with your friends


Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

View more education articles »