Today’s tickers: SKX, FLO & STJ
Options brief will resume November 27, 2012.
SKX - Skechers USA, Inc. – An upgrade to ‘Positive’ from ‘Neutral’ with a 12-month target price increase to $22.00 from $19.00 at Susquehanna today kicked shares in shoemaker, Skechers USA, Inc., up as much as 13.6% to $19.26 on Wednesday. The sharp rise in shares sparked heavier-than-usual trading traffic in Skechers options this morning, with notable volumes building in upside calls on the footwear company. It looks like some traders are positioning for shares in the name to extend gains, while other strategists are taking profits on previously established bullish positions. The Dec. $17 strike call changed hands 1,000 times against open interest of 1,445 contracts within minutes of the opening bell today. Much of the open interest in the $17 strike call is the result of trading that took place on Monday; 1,000 of these contracts were purchased on Monday afternoon at a premium of $0.74 apiece. Today, it looks like the buyer of those 1,000 option contracts is selling-to-close the position for an average premium of $1.90 each, and pocketing net profits of around $1.16 per contract in the process. Fresh in-the-money call buying on SKX is apparent at the Dec. $18 strike where 300 lots were purchased at an average premium of $1.07 each. Buyers of these contracts profit at expiration next month as long as shares in Skechers settle above the average breakeven price of $19.07. Bullish positioning spread to the Jan. $18 and $20 strike calls, as well. Traders snapped up roughly 200 lots at each striking price, paying average premiums of $1.72 and $0.68 per contract, respectively. Upwards of 3,300 call and put options are in play on the Manhattan Beach, Calif.-based company as of 11:50 a.m. ET, versus the stock’s average daily options volume of around 430 contracts. Calls are far more active than puts, with the call-to-put ratio up above 11.6 as of the…
