Lululemon Athletica inc. Calls Active Amid Stock's New High

Lululemon Athletica inc. (LULU) call buying picks up

by Griffin Kruse

Published on Feb 19, 2015 at 3:43 PM
Updated on Apr 20, 2015 at 5:32 PM

It's been a wild year so far for Lululemon Athletica inc. (NASDAQ:LULU), with the company parting ways with founder and board member Chip Wilson, as well as announcing plans to open stores in Middle Eastern countries such as Qatar, Kuwait, and the United Arab Emirates. Furthermore, the stock is up 20% year-to-date and notched a fresh annual high of $67.90 this afternoon. Not surprisingly, call buying activity in the options pits is increasing at a steady clip.

Specifically, LULU calls are more active than puts by a roughly 3-to-1 margin today, and are running at about 1.6 times the average intraday rate. The most popular strike is the February 68 call, which is more than doubling the next most popular option (the March 70 call) in volume, driven by apparent buy-to-open activity. By purchasing this call, traders expect the security to finish north of $68 by Friday's close, when the contracts expire.

Looking back over the past two weeks, however, put buying has actually been more popular than usual on Lululemon Athletica inc. (NASDAQ:LULU). At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.59 ranks higher than 75% of all similar readings taken over the past year. At last check, LULU is fractionally higher at $66.90.

Daily Chart of LULU Since November 2014

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