Put Traders Circle Abercrombie & Fitch Co. (ANF)

Abercrombie & Fitch Co. put buyers and sellers were active yesterday

Digital Content Group
Nov 7, 2014 at 10:11 AM
facebook twitter linkedin


Abercrombie & Fitch Co. (NYSE:ANF) plunged right out of the gate this morning on a third-quarter sales warning, but it was a different story yesterday. On Thursday, the shares gained 4.7%, prompting a rush of options betting -- especially on the put side, where contracts crossed at an 83% mark-up to the daily average.

The two most active options were the weekly 11/7 34-strike put and the December 25 put, where a collective 3,151 contracts changed hands. Open interest at both strikes rose overnight, suggesting new positions were initiated. However, whereas the weekly puts traded mostly at the ask price, the back-month puts were exchanged largely at the bid price -- pointing to buy-to-open and sell-to-open activity, respectively.

Thursday's put buyers, who bet on ANF dropping below $34 by tonight's close (when the weekly contracts expire), are in luck. ANF has tumbled nearly 13% this morning to trade at $30.82, and earlier touched a two-year low of $30.31. On the other hand, the deep out-of-the-money put writers may be getting a little nervous, as they need ANF to maintain its perch atop $25 through the close on Friday, Dec. 19 -- when back-month options expire. Due to this morning's bear gap, delta on the back-month put has moved to negative 0.17 from negative 0.079 at Thursday's close.

Taking a step back, yesterday's preference for short-term Abercrombie & Fitch Co. (NYSE:ANF) puts over calls is fairly typical. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.79 ranks in the 97th percentile of its annual range, meaning speculators have played puts over calls at a near-extreme rate, among options set to expire within three months.

 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!