Is Kate Spade heading for another dip?
Traders are positioning for a possible drop in shares of Kate Spade.
optionMONSTER's monitoring program shows that more than 2,800 June 22 puts were purchased for $0.62 to $1.35 yesterday. This represents new positioning, as volume was more than double the strike's open interest of 1,251 contracts.
Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors can buy them to hedge long positions, but in-the-money puts, such as those purchased today, are often used to speculate on a drop. (See our Education section)
KATE fell 4.55 percent to $21.63 yesterday and is down 11 percent in the last month. The women's apparel and accessories retailer reported mixed quarterly results on May 4 and is expected to announce its next earnings numbers on Aug. 4.
Overall option volume was 3 times greater than average in the name yesterday. Puts outnumbered calls by a bearish 3-to-1 ratio.
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