NEW YORK (Real Money) -- Major indices have been setting new records and there are few bargains to be had. That makes situational trading the best game in town, and Urban Outfitters(URBN) - Get Report has been an excellent vehicle for that type of play over the past decade.

The retail chain is debt free, its shares are volatile and the company always makes money (which eliminates the worry of fiscal distress). But Monday's news that fiscal first-quarter earnings came in at 25 cents per share vs. 26 cents last year torpedoed the stock in after-hours trading. 

URBN's shares fetched $47.25 as recently as March 20 when fiscal 2015 earnings estimates were centered on $2 per share. Was a drop of about $1.7 billion in market value really justified on what appears to be a cut to $1.80 or so in EPS?

What if you could enter the trade even more cheaply? Here is what the January 2017 puts looked like before the earnings announcement:

History says that traders are often willing to pay more than 20 times current year's earnings to own this stock. Every sojourn to lower multiples has proven to be a good entry point:

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My advice: Pick a strike price you'd be happy with and be ready to pounce. Many times, the initial option trades turn out to be the best prices of the day for put sellers. Media talking heads will be busy explaining the drop and nobody will be feeling optimistic, so that's when you get the best deals.

I sold URBN puts last fall on weakness and closed them out very early when the stock rallied. Don't worry about the long expiration date. They bring in the maximum URmoney upfront, lower the "if put" prices the most and rarely need to held to maturity.

Editor's Note: This article was originally published at 9:22 a.m. EDT on Real Money Pro on May 19.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.