Struggling Abercrombie & Fitch Co. (ANF) Attracts Bears

Abercrombie & Fitch Co. (ANF) hasn't seen much success lately

by

Published on Feb 25, 2015 at 2:29 PM
Updated on Apr 20, 2015 at 5:32 PM

Abercrombie & Fitch Co. (NYSE:ANF) has been floundering in 2015, with a year-to-date deficit of 12.4%. That trend is continuing today, as the shares were last seen 2.3% lower at $25.08. Options traders are stepping up to make bearish bets on the equity, with puts crossing the tape at a slightly accelerated clip. Most active by a mile is the weekly 3/6 25-strike put, which has seen over three times as much action as the next closest option.

Speculators appear to be buying to open the contracts, anticipating ANF will fall below $25 by the close on Friday, March 6, when the weekly series expires. At their intraday low, the shares breached the quarter-century mark for the first time since Feb. 13.

Options traders have been buying to open ANF puts over calls for some time now. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.91 ranks in the 81st annual percentile. Not only that, but ANF's Schaeffer's put/call open interest ratio (SOIR) of 1.70 sits higher than 84% of all similar readings from the past year, indicating traders are much more put-skewed toward the shares than usual.

Analysts, too, have cast a doubtful eye toward the security. Seventeen out of 24 covering brokerage firms call Abercrombie & Fitch Co. (NYSE:ANF) a "hold" or worse. In fact, just today, Janney cut its price target on the stock to $20 from $26. Elsewhere, the retailer has drawn the ire of the U.S. Supreme Court.


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