Men's Wearhouse draws bulls again
The bulls are shopping for a rally in Men's Wearhouse again before next week's earnings report.
optionMONSTER's Heat Seeker monitoring program detected a complex bullish trade yesterday involving 2,500 contracts each at three strikes: The April 50 calls were bought for $1.85, the March 48 puts were sold for $1.59, and the March 43 puts were bought for $0.49. That translates into a cost of $0.75.
The strategy uses income from a put credit spread to help pay for long calls , which stand to appreciate if the retailer climbs over the next two months. He or she can also lose $5 if the stock drops to $43 or lower. (See our Education section)
MW rose 0.7 percent to $48.97 yesterday. The apparel retailer has snaked in a range for more than a year as it deals with management changes and integrates its purchase of Jos. A Bank. Quarterly results on March 11 are the next likely catalyst.
Men's Wearhouse also saw buying in the April 50 calls in the previous session . The Heat Seeker identified two other highly profitable MW option trades in recent months, one on Dec. 16 and the other on Jan. 21 .
Yesterday's total option volume in the name was 13 times its daily average for the last month.
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