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DSW receives a big vote of confidence

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Shoe retailer DSW has been trading sideways since reporting earnings last month, and one large trader apparently believes that any downside will be limited in the next month.

optionMONSTER's tracking systems detected the sale of 9,500 July 70 puts for the bid price of $0.70 on Friday. This is clearly a new position, as the open interest in the strike was just 332 contracts before the trade appeared.

The put seller will keep the $0.70 credit as profit if DSW is above $70 at expiration in mid-July. If the stock is below that level, the trader will face the obligation to buy shares at an effective price of $69.30 when the credit is included. (See our Education section)

DSW rose 0.5 percent on Friday to close at $72.72. The footwear and accessories company has been range-bound since gapping up from the $70 level on May 29 after beating earnings and revenue forecasts while raises guidance.

Overall option volume in the name was almost 18 times its daily average for the last month.

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