Options brief will resume March 14, 2012.
TIF - Tiffany & Co. – Shares in the high-end jeweler are up 0.70% at $69.24 today with one week to go before the New York, New York-based retailer reports fourth-quarter earnings ahead of the opening bell next Tuesday. A sizable bullish options trade initiated on Tiffany & Co. this morning suggests one strategist is positioning for the price of the underlying to rally sharply in the near term. The trader appears to have purchased a roughly 3,500-lot April $70/$75 call spread for a net premium of $1.54 per contract. The position starts making money if shares in Tiffany rally another 3.3% to surpass the average breakeven price of $71.54, while maximum potential profits of $3.46 per contract are available in the event that the shares surge 8.3% to top $75.00 at expiration. TIF’s shares last traded above $75.00 back in mid-November.
URBN - Urban Outfitters, Inc. – Bearish activity in the front month options on teen retailer Urban Outfitters indicates some traders are positioning for shares in the name to decline following the Company’s fourth-quarter earnings report after the final bell today. Shares in Urban currently trade 0.50% lower on the session at $29.35. One strategist appears to have purchased an 850-lot Mar. $28/$29 debit put spread for a net premium of $0.35 per contract. The trader may be taking an outright bearish stance on the retailer or could be hedging a long position in the underlying shares. Profits are available on the spread should shares in URBN decline 2.4% to breach the effective breakeven point on the downside at $28.66, while maximum possible profits of $0.65 per contract accumulate if the stock drops 4.6% to settle below $28.00 at March expiration. Call selling up at the Mar. $30 strike, where some 755 contracts sold for an average premium of $0.87 each against open interest of 3,428 positions, is another sign of bearish sentiment on the stock heading into earnings. Sellers of the contacts could be closing previously established positions or getting naked short the calls in the expectation that shares will remain under $30.00 through expiration.
RVSN - RADVISION, Ltd. – The provider of communications technology and products popped up on our ‘hot by options volume’ market scanner this morning due to heavier than usual activity in April expiry calls. Shares in RADVISION rallied as much as 17.1% today to an intraday high of $8.96, spurring at least one trader to position for further upside moves in the stock in the near term. Options on RADVISION are most active at the April $10 strike, where more than 770 calls changed hands against zero open positions. It looks like nearly all of the calls were purchased for an average premium of $0.29 a-pop. Call buyers stand prepared to profit at expiration next month should RADVISION’s shares surge 14.8% over today’s high of $8.96 to surpass the average breakeven price of $10.29. RVSN’s shares last traded above $10.29 back in April 2011.
Caitlin Duffy
Equity Options Analyst
