Someone apparently thinks that Deckers Outdoor is ready for a comeback.
optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,300 September 60 calls for $2.40 and the sale of an equal number of September 67.50 calls for $0.40. At the same time, 3,300 August 57.50 calls were sold for $2.15 and an equal number of August 65 calls were bought for $0.15.
Volume was below previous open interest in the August strike but not the September options, indicating that a vertical call spread was closed and rolled forward in time. The net cost was zero, excluding fees and commissions.
The strategy controls a move between two prices at low cost, offering the potential for significant leverage. Adjusting the position provides another month in the trade while preventing the investor from being assigned shares at August expiration at the end of next week. (See our Education section)
DECK rose 2.44 percent to $59.21 yesterday. The footwear maker lost about three-quarters of its value between November 2011 and October 2012 but has been trying to rebound since. While quarterly results have mostly lagged expectations, the shares have been climbing against significant short interest and now seem to be finding support above the key 50-day moving average.
Total option volume was more than triple the daily average in the session, according to the Heat Seeker. Calls outnumbered puts by more than 5 to 1.
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