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Option Clips: Aeropostale Inc, Apple Inc. (AAPL), and Coach, Inc.

Reviewing notable options activity on Aeropostale Inc, Apple Inc., and Coach, Inc.

by 3/14/2014 1:42 PM
Stocks quoted in this article:

Two equities generating buzz on StockTwits today are teen retailer Aeropostale Inc (NYSE:ARO) and tech giant Apple Inc. (NASDAQ:AAPL). Meanwhile, upscale accessories maker Coach, Inc. (NYSE:COH) has also been active in the options pits. Here's a look at how traders have been aligning their speculative bets today.

  • Aeropostale Inc (NYSE:ARO) is down 15.1% at $6.21, after touching a 10-plus-year low of $5.99 earlier in the session. The company last night confessed to a steeper-than-expected per-share loss in the fourth quarter, and the subsequent plunge landed ARO on the short-sale restricted list. Against this backdrop, ARO options are flying off the shelves at six times the average intraday rate, especially on the put side, with roughly 15,000 contracts exchanged. Digging deeper, it appears one trader is liquidating a calendar spread, selling and buying to close the March 7 and April 6 puts, respectively.

  • Apple Inc. (NASDAQ:AAPL) options are in demand today, with the stock's 30-day at-the-money implied volatility 1.4% higher at 19.5%. So far, the iPhone parent has seen around 215,000 calls and 137,000 puts change hands, compared to its average intraday volume of around 146,000 calls and 102,000 puts. Upon closer inspection, speculators are placing eleventh-hour bets on AAPL's afternoon trajectory, as the top 10 most active strikes expire at the closing bell today. Plus, volume exceeds open interest at all of the strikes, underscoring our theory of last-minute initiations. At last check, AAPL is 1.1% lower at $525.03.

  • Finally, Coach, Inc. (NYSE:COH) is 2.6% higher at $49.43, on what Trade-Alert indicates may be buyout speculation. In the options pits, traders are rolling the dice on more upside for the stock in the short term, as COH has seen roughly 15,000 calls cross the tape -- eight times the norm, and more than seven times the number of puts exchanged. Most popular is the out-of-the-money April 52.50 call, where more than 5,000 contracts have traded, primarily at the ask price. Plus, volume has surpassed open interest at the back-month strike, hinting at newly bought bullish bets. However, it's worth noting that short interest represents more than two weeks' worth of pent-up buying demand, at COH's average pace of trading, suggesting short sellers could be buying the calls to hedge their bearish bets.

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