Bullish options trading investors think that retailer Urban Outfitters (NASDAQ:
URBN ) will rise again after a weak earnings report last month. OptionMONSTERs
Heat Seeker tracking system found that the purchase of more than 8,900 URBN
September 32 Calls , most priced for $2.45. The open interest at the strike was
just 288 contracts, so the trades were clearly opening new positions. URBN ended
the session yesterday up 1.96% at $31.28. It must climb more than 10% by
expiration for those calls to turn a profit. The specialty retailer cratered on
March 8, falling from about $38 to $32 after earnings badly missed estimates.
Even worse was a sharp drop in margins, which triggered worries about its
product mix, sourcing, and exposure to rising commodity prices. Find more option
analysis and trading ideas at Options Trading Strategies . The stock bounced
around $29.50 later in the month, slightly above its October low. Since then the
shares have been working their way higher, and yesterday the company received an
upgrade to overweight from Piper Jaffray. Urban Outfitters (NASDAQ: URBN) (Chart
courtesy of tradeMONSTER ) Chart technicians typically look for large gaps to be
filled on stock charts. As a result, some traders may expect URBN to climb back
toward about $35 if not higher. Overall option volume was five times greater
than average yesterday, with calls accounting for a bullish 84 percent of the
activity. optionMONSTER ® provides stock market insight, option trade ideas,
and options education to meet the needs of do-it-yourself investors.
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