A complex trade is looking for a rebound in Tiffany, which hit a 52-week low yesterday.
TIF is up 1.45 percent to $51.02 today, even as the broader market gives up ground. Shares of the jewelry icon closed at $50.29 yesterday after dipping below the $50 mark, the stock's lowest levels since October 2010. The stock was trading near $75 in late March.
Almost 9,000 TIF options have changed hands already today, 3 times its daily average. Most of that volume is in a three-way combination trade.
A trader bought 2,000 November 50 calls for $4.93, sold 4,000 November 57.50 calls for $1.73, and sold 1,200 November 42.50 puts for the bid price of $1.45. The previous open interest at each strike was fewer than 1,000.
The position takes a maximum profit if TIF is right around $57.50 at expiration, a level of resistance last visited a month ago. Above that level the trader is effectively short shares, given the call ratio spread , and is showing a willingness to get long the stock if it trades below $42.50.
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