GPS - Gap, Inc. – Apparel retailer, Gap, Inc., popped up on our scanners this morning after a sizable trade was initiated in the August expiry put options. Nearly 5,000 of the Aug $46 strike puts changed hands close to the start of the session versus open interest of 778 contracts. Volume in the Aug $46 puts is more than twice the stock’s average daily options volume of around 2,100 contracts. Shares in GPS, up roughly 40% since the start of 2013, are off 0.30% on the day to stand at $46.33, hovering just below a multi-year high of $46.56 reached last week. Options changing hands on the retailer this morning suggest one trader is bracing for near-term weakness in the price of the underlying. It looks like the strategist purchased around 4,000 Aug $46 puts at a premium of $0.86 per contract. The trade starts making money if shares in Gap decline 2.6% from the current price of $46.33 to breach the effective breakeven point on the downside at $45.14 by August expiration next week. The long put position may be an outright bearish bet on the stock or a protective stance to hedge a long position in the shares. Gap, Inc. is scheduled to report second-quarter earnings on August 22nd, the week following expiration of the Aug 16 ’13 options.
TWX - Time Warner Inc. – Options changing hands on media and entertainment company, Time Warner, today look for shares in the name to potentially come off the multi-year highs highs hit earlier in the session. Shares in TWX earlier rose 0.70% to $64.72 ahead of the company’s second-quarter earnings release prior to the opening bell on Wednesday. Shares in Time Warner are up nearly 60% since this time last year. A sizable trade…
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