VF has been consolidating after a monster run, but now the bulls are back.
optionMONSTER's Heat Seeker monitoring system detected the purchase of about 1,000 January 150 calls for $4.30 and the sale of 3,000 January 140 puts for $1.15. Volume was more than 16 times open interest at both strikes.
The trade is a bullish bet that the clothing stock will push higher over the next five weeks. It's unusual because 3 times more puts were sold than the number of calls bought. That generated additional income to lower the cost basis, positioning the investor to make money from only a small move. (See our Education section for more on selling puts and buying calls .)
VFC rose 1.98 percent to $151.11 yesterday, nearing its 200-day moving average. Its current price level was resistance in the spring and summer, which could be leading some chart watchers be believe that it will now prove support.
The option strategy cost about $85,000, or $0.85 per contract bought. The investor faces potentially giant losses if it goes below $140, but he or she may not consider that a big risk because VFC formed several peaks above that level between May and July.
Almost 5,000 contracts traded in the stock on Monday, more than 7 times typical amounts.
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