Another issue with and issue that was recently priced is that typically the options are completely overpriced relative to a stock that has been trading for a long time. Because of this we are going to sell a put spread over getting outright long calls in KORS. The May 46/43 put spread collects over $1.00 and has decent odds for success. With the stocks slow trend up and relatively pricey IV, I think we can be out of this trade faster than many realize.
Our goal is to buy the spread back for less than $0.50.
Trades: Sell to open KORS May 46 puts at $2.40 and buy to open KORS May 43 puts for $1.30.
Net sell the 46/43 put spread at $1.10.
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