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Option Brief: Coach Inc (NYSE:COH) is continuing to slide this morning, following yesterday's disappointing investor and analyst day, and a subsequent series of bearish brokerage notes earlier. At last check, the shares were down 3.1% at $34.59, had touched a new multi-year low of $34.58, and had found a place on the short-sale restricted list for the second day in a row. As such, bearish speculators are rushing into the retailer's options pits to find alternative ways to bet on additional downside.
Currently, intraday put volume is running at four times the norm, and easily outstripping call volume. Most active is the July 35 put, which appears to be seeing buy-to-open activity, as speculators take aim at lower lows. Nearly 3,000 contracts have traded here at a volume-weighted average price (VWAP) of $1.24, yielding an at-expiration breakeven of $33.76 (strike less VWAP). Additional gains will accrue on a move all the way down to zero, while the traders will part with no more than the initial premium paid, should Coach Inc (NYSE:COH) be perched atop the strike at the close on Friday, July 18 -- when the soon-to-be front-month contracts expire.