Coach is gaining with upside options activity despite broad market headwinds, indicating that fashion is not yet a victim of the economic downturn.
The upscale accessories retailer normally trades 3,400 calls in a full session, but this morning more than 16,300 changed hands in the first two hours alone, according to OptionMonster's proprietary tracking programs.
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The Coach trading follows a Barron's article that quoted Chris McHugh of Turner MidCap Growth Investor Fund, citing his bullish outlook for the company. McHugh said it is well positioned to profit from a weaker economy, noting that it will soon introduce its Poppy line of lower-priced handbags.
Today's options action was in contracts well out of the money, the July 29 and July 30 calls, as Coach shares traded at $26.69. The stock is up more than 2 percent on the session to over $26 in afternoon trading, holding the bulk of its gains against a 170-point selloff in the DJIA.
Najarian owns shares of Coach
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Jon 'DRJ' Najarian is a professional investor, CNBC contributor, and cofounder of OptionMonster.com.