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Crocs, Inc. (NASDAQ:CROX - 14.74) saw an unusual influx of bearish options activity yesterday, as roughly 5,700 puts changed hands -- nearly 10 times the security's average daily put volume. By comparison, fewer than 250 calls were traded. It appears that a number of Tuesday's put players are expecting the shoe maker to falter over the next few weeks, with some betting on CROX to breach its 100-day moving average for the first time since early February.

Most active was the April 14 put, where a block of 3,000 contracts crossed at an ask price of $0.14 each. Meanwhile, open interest at this strike surged overnight, signaling the initiation of new positions. In order for the speculator to secure a profit from these bought-to-open puts, the equity must retreat below $13.86 (strike price minus the premium paid) by front-month expiration. This reflects a 6% drop from yesterday's closing price of $14.74. The delta for these options sits at negative 0.21, giving them a 21% chance of landing in the money.

Also garnering notable attention was the April 15 put, which saw 2,269 contracts exchanged -- all of them at the ask price, pointing to buyer-fueled activity. Specifically, these puts traded at a volume-weighted average price (VWAP) of $0.55. Open interest climbed by 1,940 contracts overnight, again indicating the addition of fresh bearish bets. In this scenario, speculators are counting on Crocs, Inc. to fall south of $14.45 (strike price less the VWAP) by the close on April 19 -- just a stone's throw away from its present perch.

This skepticism toward CROX is understandable, considering the stock's year-over-year decline of more than 30%. The equity has also trailed the broader S&P 500 Index (SPX) by north of 10 percentage points during the past three months. Nevertheless, sentiment among the brokerage bunch remains optimistically skewed. The security sports four "strong buys" and one "buy" endorsement, compared to four "holds" and not a single "sell" recommendation. Even more telling, the average 12-month price target for CROX stands at $18.22, denoting a premium of close to 24% from current levels. This leaves the door wide open for future downgrades and/or price-target cuts, which could pressure the shares lower.


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