By Mike Yamamoto, managing editor of OptionMonster
NEW YORK -- Abercrombie & Fitch (ANF) has been rebounding, and traders are looking for the comeback to continue.
OptionMonster's tracking programs detected strong buying in the August 50 calls Tuesday for $1.26 to $1.86. More than 4,500 traded in volume well above the previous open interest of 2,944 contracts, indicating that new positions were initiated.
Calls lock in the price where shares can be purchased, which can provide significant leverage to moves in the underlying stock, but the contracts will expire worthless without a rally.Abercrombie's shares rose 3.77% to $47.93 Tuesday. The specialty retailer had a rough couple of months in May and June, falling after its last earnings report and then along with the rest of the market. But the stock rose sharply after bouncing at the $44 level last week and is nowback above its 200-day moving average. Total option volume was five times greater than average in the session, with calls outnumbering puts by 2 to 1. Yamamoto has no positions in ANF.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV