Tiffany is attracting fast-money trades

optionMONSTER

Investors want to make some fast money when Tiffany reports earnings tomorrow morning.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,100 Weekly 75 calls expiring next Friday for $0.48. Volume was more than 7 times open interest at the strike.

Those contracts lock in a $75 purchase price on the jewelry retailer, which gives them the potential to generate huge leverage on a move to that level. But they'll also expire worthless if the shares fail to make that move.

TIF is down 1.84 percent to $68.31 in early afternoon trading but is up 19 percent so far this year. The stock has been trending higher despite missing earnings expectations for the last four quarters, which could be leading some traders to expect a big pop if it beats this time around.

Tiffany hasn't seen $75 since late 2011. Targeting that level with options lowers the cost of the trade and spares the investor the expense of unwinding a more expensive long position in the stock if they're wrong. (See our Education section for other risk-management techniques.)

More than 10,000 contracts have traded in the company so far today, according to the Heat Seeker.

(Be sure to check out optionMONSTER's dedicated page on weekly options for other fast-moving short-term contracts.)


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