Lululemon Athletica, Inc. – Optionson the athletic apparel retailer are changing hands at a feverish pacetoday ahead of Lululemon's first-quarter earnings report prior to theopening bell on Thursday morning. Shares in the provider of high-endyoga pants and stylish gym accessories are off their intraday peak, butcontinue to trade 1.5% higher on the session at $71.76 as of 1:00 p.m.in New York. Roughly half of the 43,000 contracts in play on LULU inthe first half of the session are part of a large spread in the Juneexpiry.
One strategist established a bear put spread ahead of theearnings report, perhaps to protect a long position in the underlyingshares against adverse moves in the price of the underlying. Most of the10,000 lot June $60/$67.5 put spread traded on the Amex and waspurchased for a premium of $1.30 per contract. The spread establishesdownside protection beneath a breakeven share price of $66.20 andextends down to $60.00. Shares in LULU would need to plunge 16.4% afterearnings in order for the stock breach the $60.00 level. Lululemon'sshares are up nearly 50.0% year-to-date and last traded below $60.00back on January 20, 2012.
Mattress Firm, Inc. (MFRM) – Bullishbets in Mattress Firm options cropped up today despite the near 25.0%post-earnings plunge in shares of the mattress retailer to an intradaylow of $26.70. Shares in Mattress Firm dropped on lower-than-anticipatedfirst-quarter revenue and a reduced sales forecast for the secondquarter, but some traders appear to be positioning for MFRM's shares torecoup losses during the second half of the year. Near-term bulls pickedup around 120 calls at the June $30 strike for an average premium of$1.11 apiece, while longer-dated Oct. $30 strike calls were purchasedsome 150 times at an average premium of $3.38 each. Call buyers in thefront month stand ready to profit should the stock rebound above theaverage breakeven price of $31.11 by expiration next week. Traders longthe Oct. $30 strike call make money if Mattress Firm's shares rally13.7% over the current price of $29.36 to exceed $33.38 by Octoberexpiration. MFRM shareholders are hurting today, but not quite as muchas investors in luxury mattress provider, Tempur-Pedic (TPX). TPX shareshalved in value after the company lowered its full-year earnings andsales forecasts. The company is scheduled to report second-quarterresults after the final bell on July 26th.
Suncor Energy, Inc. (SU) – Near-termbullish positioning in Suncor Energy, Inc. options is on the risetoday, with shares in the Calgary, Alberta-based energy company upbetter than 3.8% at $28.32 as of 12:00 p.m. ET. Options on Suncor aremost active at the Jun. $29 strike where more than 9,400 calls changedhands against open interest of 3,993 contracts. It looks like themajority of the calls were purchased for an average premium of $0.35apiece this morning, thus positioning buyers to profit should SU'sshares extend gains in the near term. Traders long the calls make moneyshould shares rally another 3.6% to surpass the average breakeven priceof $29.35 by June expiration.
Strategists snapping up calls at the Jun.$29 strike on Tuesday paid an average premium of $0.19 apiece forapproximately 1,400 of the contracts. The value of those positions hasmore than doubled overnight, with premium on the calls up at $0.48 eachas of midday in New York. Providing quality reviews, articles and writings on crude oil, energy and gas online.
No comments:
Post a Comment