COH – Coach, Inc. – The retailer of high-end handbags and accessories realized a more than 5.05% increase in the price of its shares today to pin down an intraday high of $37.66. Despite the substantial rally in Coach’s shares options traders are purchasing put options on the stock. Put buying has been a popular trading strategy as of late and has occurred repeatedly in recent weeks. It looks like the majority of today’s options action on Coach is the work of longer-term pessimists wary of the potential for shares to reverse course ahead of February expiration. Put players picked up roughly 5,300 puts at the February 2011 $37 strike for premium of $4.00 each. Investors buying these contracts may be building up downside protection on a long position in the underlying stock. In this scenario, protection kicks in if Coach’s shares slip beneath the effective breakeven price of $33.00 ahead of expiration day in February. Alternatively, the put purchasers could be initiating outright bearish bets because they expect the handbag maker’s shares to trade at a significantly lower price in the next six months. Investors buying puts outright stand ready to make money if shares of the underlying plunge 12.4% lower to trade below $33.00 by expiration.