Options Activity Alert: TIF, URBN, RVSN

TIF – Tiffany & Co. – Shares in the high-end jeweler are up 0.70% at $69.24 today with one week to go before the New York, New York-based retailer reports fourth-quarter earnings ahead of the opening bell next Tuesday. A sizable bullish options trade initiated on Tiffany & Co. this morning suggests one strategist is positioning for the price of the underlying to rally sharply in the near term. The trader appears to have purchased a roughly 3,500-lot April $70/$75 call spread for a net premium of $1.54 per contract. The position starts making money if shares in Tiffany rally another 3.3% to surpass the average breakeven price of $71.54, while maximum potential profits of $3.46 per contract are available in the event that the shares surge 8.3% to top $75.00 at expiration. TIF’s shares last traded above $75.00 back in mid-November.

URBN – Urban Outfitters, Inc. – Bearish activity in the front month options on teen retailer Urban Outfitters indicates some traders are positioning for shares in the name to decline following the Company’s fourth-quarter earnings report after the final bell today. Shares in Urban currently trade 0.50% lower on the session at $29.35. One strategist appears to have purchased an 850-lot Mar. $28/$29 debit put spread for a net premium of $0.35 per contract. The trader may be taking an outright bearish stance on the retailer or could be hedging a long position in the underlying shares. Profits are available on the spread should shares in URBN decline 2.4% to breach the effective breakeven point on the downside at $28.66, while maximum possible profits of $0.65 per contract accumulate if the stock drops 4.6% to settle below $28.00 at March expiration. Call selling up at the Mar. $30 strike, where some 755 contracts sold for an average premium of $0.87 each against open interest of 3,428 positions, is another sign of bearish sentiment on the stock heading into earnings. Sellers of the contacts could be closing previously established positions or getting naked short the calls in the expectation that shares will remain under $30.00 through expiration.

RVSN – RADVISION, Ltd. – The provider of communications technology and products popped up on our ‘hot by options volume’ market scanner this morning due to heavier than usual activity in April expiry calls. Shares in RADVISION rallied as much as 17.1% today to an intraday high of $8.96, spurring at least one trader to position for further upside moves in the stock in the near term. Options on RADVISION are most active at the April $10 strike, where more than 770 calls changed hands against zero open positions. It looks like nearly all of the calls were purchased for an average premium of $0.29 a-pop. Call buyers stand prepared to profit at expiration next month should RADVISION’s shares surge 14.8% over today’s high of $8.96 to surpass the average breakeven price of $10.29. RVSN’s shares last traded above $10.29 back in April 2011.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

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.

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