Investor Bets Against Jones Before Earnings

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David Russell, reporter for OptionMonster.

NEW YORK (TheStreet) -- One big investor is positioning for a markdown in Jones Apparel Group(JNY Quote), which has more than tripled this year and reports earnings tomorrow.

OptionMonster's real-time systems detected unusual buying of the November 15 puts, which traded 4,062 times for 25 cents to 30 cents. Volume was more than eight times existing open interest in the strike.

Jones Apparel is down 1.3% to $18.17 in midday trading and is little changed over the last month. The parent of clothing and shoe stores including Jones New York and Nine West has been losing momentum as it approaches the $20 area where it traded shortly before last year's stock-market collapse.

The company will report third-quarter earnings before the bell tomorrow. It reported better-than-expected sales and profit the last time it issued results on July 29.

Jones Apparel needs to fall about 19% by expiration for the puts bought today to turn a profit.

The trade pushed overall options volume in the name to six times greater than average. Puts outnumbered calls by 87 to 1.

-- Reported by David Russell of OptionMonster in New York.