Lululemon Athletica reports earnings after the bell today, and investors are positioning for a potential drop.
OptionMonster's real-time tracking systemsdetected heavy buying of the January 25 puts, which traded 5,328 times against open interest of 2,682 contracts. Institutional-sized trades occurred for $1.10 to $1.20 after the refused to break through an intraday high of $27.99 from earlier in the session.
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Lululemon rose 2.42 percent to $27.46 in afternoon trading and is up 28 percent in the last three months. The retailer of athletic apparel has spent the last six weeks trying to break through $28, a resistance level established in September 2008. Earnings beat analysts' forecasts the last time Lululemon issued results on Sept. 10.
The stock needs to fall about 13 percent by expiration for the puts bought today to turn a profit. Overall options volume in the name was 12 times greater than average, with puts exceeding calls by 6 to 1.
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David Russell is a reporter and writer for OptionMonster.