Large bullish trade in Abercrombie

2010-09-08T07:26:44Z

One big investor is bullish on Abercrombie & Fitch , attempting a three-way options strategy to maximize gains from a move higher.

optionMONSTER’s tracking systems detected the purchase of 5,000 November 30 calls for $2.15, matched against the sale of 5,000 November 35 calls for $0.90 and the sale of 5,000 November 17.50 puts for $1.05. The trade produced a net debit of just $0.20 per call contract bought before commissions.

ANF is down 1.38 percent to $25.65 in morning trading. Today’s options strategy will profit if the retailer closes above $25.20 at expiration and produce a maximum profit of 2,400 percent if the stock rises above $30.

By selling puts in addition to upside calls, the trader significantly reduced his or her cost basis but is also exposed to losses on the short put position if ANF falls below $17.50. The next potential catalyst for ANF is the release of June sales on July 9.

Who shame on Abercrombie

2010-09-08T07:26:44Z

As Jezebel also points out, this isn’t the first time Abercrombie has gotten a bad rap for questionable employment practices back in 2003 alleging that they discriminate against African American, Hispanic, and Asians by trying to create an “all-white ‘A&F look” by hiring an overwhelmingly majority white employee force. In addition, they were sued back in 2003 for “forcing” employees to purchase their clothing (denied). Sorry A&F, your days of being “cool” are over (thankfully, I was a loyal shopper at least 5 years ago. Now a days, hauling my lazy ass up to the third floor to shop at them in Cambridgeside just isn’t worth it). Proof is in the sales and a few weeks ago, Jezebel also reported on Abercrombie’s 34% drop in sales - cheaply made, over priced clothes with horrificly obscene logos on them just aren’t cool anymore. That kind of attitude is the attitude that keeps racism and elitism alive and that? Is not okay. Thankfully those A&F days are over, and my wardrobe, as I’ve been cleaning it out over the past two years, is 90% A&F free - after all I’m not a size 2 anymore and nor am I in college where wearing A&F was acceptable. I’ll stick with JCrew thankyouverymuch where at least I see a diverse sales force.

abercrombie sale

Large bullish trade in Abercrombie

Who shame on Abercrombie