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What's behind Abercrombie puts

Chris McKhann (chris.mckhann@optionmonster.com)

A large trader appears to be adjusting a downside position in Abercrombie & Fitch.

optionMONSTER's Depth Charge system detected the sale of 4,000 August 41 puts for $2.65 against previous open interest of 7,894. At the same time, 4,000 August 38.50 puts were bought for $1.30 in volume that dwarfed open interest of just 5 contracts at that strike, clearly showing that it is a new position.

This could be a credit spread , but it is far more likely that the puts were rolled lower as they moved in the money . That could be an outright bearish play or a hedge against a long position. (See our Education section)

ANF is down 1.02 percent to $38.85, its lowest level since early June. The apparel retailer was testing resistance at $44 early this month.  

Total option volume in the name already tops 11,700, more than double its daily average for the last month. Only 639 of those contracts are calls, a reflection of the session's bearish sentiment.

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