Options Brief: Men’s Wearhouse (MW)

MW – Men’s Wearhouse Inc. – One early-bird bearish options investor lumbered across the July contract on the specialty retailer of men’s suits to purchase a plain vanilla debit put spread. The pessimistic play indicates the trader expects MW’s share price to continue lower ahead of expiration day. Men’s Wearhouse shares are trading 2.10% lower at $21.24 just ahead of 10:30 am (ET). The bearish trader purchased 1,000 puts at the July $20 strike for a premium of $1.77 apiece, and sold the same number of puts at the lower July $17.5 strike for $0.79 each. The net cost of the transaction amounts to $0.98 per contract. Thus, the investor is positioned to amass maximum potential profits of $1.52 per contract if shares of the underlying stock plummet 17.6% from the current price to $17.50 by expiration day in July. The put-spreader makes money as long as shares trade below the effective breakeven price of $19.02 by expiration. Options implied volatility on Men’s Wearhouse is up 4.6% at 73.79% as of 10:31 am (ET).

About Andrew Wilkinson 1023 Articles

Affiliation: Interactive Brokers

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.

Visit: Interactive Brokers

Be the first to comment

Leave a Reply

Your email address will not be published.