Trader buys time for Saks to bounce
Saks has been pulling back since hitting five-year highs a month ago, but one trader is buying more time for a rebound.
optionMONSTER's Heat Seeker system detected the sale of 1,655 July 15 calls for $0.20 and the purchase of 1,655 November 15 calls for $0.84. Volume was below open interest in the July strike but above it in the November contracts.
This indicates that a trader is closing a long-call position in July, which expires in less than a month, and is rolling it to a later date. The adjustment cost a net $0.64 and provides another four months for the trade to work. The new calls are looking for SKS to rally above $15 by mid-November but will expire worthless if the stock remains below that level. (See our Education section)
SKS rose 1.62 percent yesterday to close at $13.81. The luxury retailer gapped higher after its earnings report last month from about $12 to $16.17, its highest price since March 2008. Shares have been drifting lower since then but appear to have found support at the $13.50 level.
Total option volume topped 11,300 contracts yesterday, 9 times its daily average for the last month.
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