This Retail Stock Could Be Volatile on Thursday

TLRD options are hot ahead of earnings

Jun 11, 2019 at 3:04 PM
facebook X logo linkedin


Options traders are blasting Tailored Brands Inc (NYSE:TLRD) ahead of the retailer's first-quarter earnings report, due after the close tomorrow, June 12. This heavy options activity is hardly new for TLRD stock, though, with both call and put open interest perched at 52-week highs.

Today, most of the action is occurring on the put side, with 13,170 puts traded, compared to 3,017 calls. The June 6 and 7 puts are most active, and while it's not entirely clear what's happening here, it's possible one trader is rolling their puts down one strike. Elsewhere, speculators are initiating new positions at the July 6 put, with those buying to open the options eyeing a bigger move below $6 over the next five weeks.

TLRD put buyers have certainly been more active than usual in recent weeks. 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 0.60 ranks in the 86th annual percentile. So, while calls have outpaced puts on an absolute basis, the rate of put buying relative to call buying has been accelerated.

This growing skepticism is seen elsewhere on Wall Street, with short interest edging up in the the most recent reporting period to 12.49 million shares. This accounts for more than one-quarter of TLRD's available float, or 5.4 times the average daily pace of trading.

Looking at the charts, it's not too hard to see why there's so much pessimism priced into Tailored Brands, with the retail stock down roughly 83% year-over-year and 57% year-to-date. Today, TLRD shares are up 3.7% at $5.82, but are still trading dangerously close to their 24-year low of $5.13 from May 31.

If past is precedent, the stock could be headed for even more losses after earnings. TLRD has closed lower the session subsequent to earnings in five of the last eight quarters -- including double-digit percentage losses following Tailored Brands' past two turns in the earnings confessional. On average, the shares have swung 14% the day after earnings, with the options market pricing in a much-larger 33.4% swing for Thursday's trading.

tlrd stock daily price chart june 11

 

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