Burlington Stores Inc (BURL) Option Bulls Cash In

BURL's bounce has sparked accelerated options activity

Jan 12, 2016 at 2:44 PM
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Burlington Stores Inc (NYSE:BURL) is trading 12.6% higher at $48.13, after the company said it expects relatively flat comparable-store sales in the fourth quarter -- apparently enough to impress investors, as warm winter weather has weighed heavily on many retailers' bottom lines. Against this backdrop, it looks like some options traders are taking profits.

Today, BURL options are flying off the shelves at six times their usual intraday rate, with calls outnumbering puts nearly 3-to-1. However, it looks like some of today's call volume may be attributable to bulls cashing in their chips. Most active are the January 2016 44- and 47-strike calls, which are now in the money. The International Securities Exchange (ISE) indicates that big blocks of the calls were sold to close this morning.

Prior to today, options traders were growing bearish ahead of earnings. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BURL's 50-day put/call volume ratio of 0.65 is higher than 89% of comparable readings from the past year.

Analysts have held on to their optimism -- all seven brokerages covering BURL give it a rating of "buy" or better, even as the security has underperformed the S&P 500 Index (SPX) over the last three months.

Burlington Stores Inc (NYSE:BURL) has been trending lower since hitting an all-time high of $61.94 last March. However, the stock is now on pace to end the week atop its 20-week moving average for the first time since mid-September.


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