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Strategy looks for drop in VF Corp.

Chris McKhann (chris.mckhann@optionmonster.com)

VF Corporation is drawing a bearish spread that will profit from a slow grind lower in shares of the global apparel company.

optionMONSTER's Depth Charge system yesterday detected the purchase of 3,500 March 150 puts for $4.53 and the sale of two blocks of 2,500 March 140 puts for $1.37 and $1.36. These are new positions, as the previous open interest at those strikes was 64 and 127 respectively.

This vertical spread cost $2.80 to open, which is the amount at risk if VFC remains above $150 through expiration in mid-March. The maximum gain in the trade, also known as a ratio spread because of the differing number of contracts at each strike, would come if the stock is around $140 at that time. (See our Education section)

VFC finished the day at $152.8, up 0.32 percent. Shares have tested resistance at $155 several times in the last two months, while support has held at $145.

More than 17,000 VFC options changed hands in the session, compared to a daily average of 1,100 contracts.

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