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Put buying targets Urban Outfitters

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A trader is positioning for further declines in Urban Outfitters, which fell along with many other retailers yesterday.

Nearly 1,200 January 36 puts were bought in about half an hour yesterday for $0.55, according to optionMONSTER's Depth Charge system. The volume was above the strike's open interest of 997 contracts at the start of the session, indicating that this is a new position.

URBN fell 2.7 percent yesterday to close at $38.24 after an industry report indicated that the retail sector may have seen weaker holiday sales than expected. The clothing retailer has pulled back since Dec. 19, when it matched a 52-week high of $40.65 first reached in September after gapping higher on strong earnings.

The put buying was not tied to any stock trades identified by our systems yesterday, but it could be a hedge to protect recent gains . If not, these options are making a straight bearish bet that URBN will fall roughly 7.5 percent by expiration on Jan. 18 to recent support levels from mid-November. (See our Education section)

Total option volume in the name was 2,838 contracts, more than double its daily average in the last month. 

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