Option Bears Target Struggling American Eagle Outfitters (AEO)

American Eagle Outfitters is following rival Abercrombie & Fitch Co. lower

Digital Content Group
Nov 7, 2014 at 2:16 PM
facebook X logo linkedin

American Eagle Outfitters (NYSE:AEO) is swooning in sympathy with fellow teen apparel retailer Abercrombie & Fitch Co. (NYSE:ANF), off 5.7% at $13.03. Not surprisingly, put traders have been active in AEO's options pits, with the contracts crossing at double the expected intraday clip. What's more, the stock's 30-day at-the-money implied volatility (IV) has spiked 11.1% to 54.4%, hinting at strong demand for short-term strikes.

Speaking of which, the November 13 put is seeing more action than any other strike, as 5,777 contracts have changed hands so far. Almost all of them have done so at the ask price, IV is higher, and volume tops open interest, collectively suggesting newly bought bearish bets.

Long story short, these speculators anticipate AEO will lose its foothold atop $13 by the close on Friday, Nov. 21, when front-month options expire. Delta on the at-the-money put is negative 0.47 -- compared to negative 0.24 last night -- meaning the market is giving the option a roughly 1-in-2 chance of being in the money at expiration.

Today's steep losses are more of the same for American Eagle Outfitters (NYSE:AEO), which has given back more than 9% of its value in 2014. However, the $13 area has served as a reliable layer of support in recent weeks, as has the stock's 20-week moving average, currently docked at $12.64.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI