A huge trade is betting that downside potential will be limited in Ascena Retail through early 2016.
optionMONSTER's tracking programs detected the sale of 20,300 January 9 puts in one print for $0.26 on Friday. This is clearly a new position, as open interest in the strike was only 420 contracts before the trade occurred.
Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think the risk of a big drop is limited. (See our Coaching section.)
ASNA fell 2.93 percent to $9.93 on Friday and is down 18 percent in the last month. The apparel retailer--whose brands include Ann Taylor, Justice, and Lane Bryant--reported bullish quarterly results on Sept. 16. Its next earnings report is estimated for March 1.
Friday's put sale pushed overall option volume in Ascena to quadruple its daily session average for the last month.
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