Vote of confidence in ANN at key level
Mike Yamamoto | [email protected]
optionMONSTER's tracking systems show that 2,000 January 32 puts were sold at the same second for $1.10 this morning. The volume was nearly 4 times the strike's open interest at the beginning of the day, clearly indicating that this is a new position.
This put seller is looking for the women's clothing company to close above the $32 strike price at expiration in three weeks. If shares are below that level, the trader will face the obligation to buy the stock at an effective price of $30.90 when the credit from the put sale is included.
ANN is down 0.47 percent to $31.96 near midday trading. Shares dropped to support at current prices on the day after Christmas when the retail sector was hit hard by a disappointing holiday-sales report.
The stock has been trending lower with its 50-day moving average since early November. The $32 level is key because ANN gapped up to this area from about $28 in mid-August with a strong second-quarter earnings report.
The trading made up the bulk of ANN's total option volume of 2,754 so far today, which is already 7 times its daily average for the last month.