One trader is looking for large gains Abercrombie & Fitch in the next several months.
ANF is up fractionally today to $31.47 after hitting a 52-week low of $30.64 in yesterday's session. That move tested a support level going back to August 2009 for the apparel retailer.
optionMONSTER's Heat Seeker system shows that 2,732 November 60 calls traded today for $0.16 at well more than open interest at that strike. Minutes later, a block of 2,732 January 60 calls changed hands for $0.22 against open interest of 2,915 contracts.
Although it initially appeared that both sets of strikes were bought, this seems highly unlikely given the trade data. Instead, it seems much more likely that this is a calendar spread with the January options bought and the November contracts sold.
This would give the trader a bullish position for a very limited cost of just $0.06, which is all that could be lost if ANF remains where it is up through the first expiration. The maximum gain in the trade would come with shares right around $60 at expiration, a level where they last traded in November. The stock was above $50 only a month ago. (See our Education section)
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