Skechers attracts bullish earnings play
A large trade is looking Skechers USA to rally after it reports earnings later this week.
optionMONSTER's monitoring program shows that 6,000 Weekly 32.50 calls were purchased for $1.50 to $1.60 and 6,000 Weekly 35.50 calls were sold for $0.45 to $0.54 today. These are clearly new positions, as volume was far above open interest in both strikes.
This vertical spread is looking for SKX to rally above $32.50 by expiration a week from today. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $35. (See our Education section)
SKX is down 0.43 percent to $32.25 in afternoon trading but is up 13 percent in the last three months. The shoe retailer, which reported bullish results on April 21, is scheduled to release its next quarterly numbers after the close on Thursday.
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