Tiffany shares fell 1.36 percent to $56.59, so those puts are in the money. These options will closely track the stock, but in the opposite direction — profiting to the downside and losing money if it rises or doesn’t move.
Shares hit a new 52-week low after the company’s earnings report last week and are now at a support level that goes back to October 2010. Yesterday’s option action shows that there is clearly a belief that Tiffany could break this support and go even lower.
More than 13,000 contracts traded overall in the name, over twice its daily average. Puts outnumbered calls by 7 to 1.
Additional News: Tiffany, Signet Forecasts Disappoint, US Slowing
Additional Views: How to Trade Banks & Tiffany Earnings
___________________________
___________________________
Options Trading School:
___________________________
Chris McKhann is an analyst and writer for OptionMonster. McKhann has no positions in Tifanny.
___________________________
Disclaimer