Lululemon Athletica Inc. (LULU) is a consumer athletic apparel and accessory manufacturer based in Vancouver, British Columbia. At the time of this post (11:45AM CST), LULU is currently trading at 65.40, down 0.18% on the day. The stock is currently well within the upper portion of its 52 week trading range of 36.26-68.99, and remains in tight bullish consolidation over key 65.00 support on a daily chart.

Earlier this morning at approximately 9:23AM CST, OptionHacker detected and flagged some unusually bullish options activity as a trader stepped in and bought a large block of 1,545 of the weekly Mar 6th 66.0 strike calls. This trader paid well above the prevailing ask price at the time, buying up these calls for 0.44 each against an existing open interest of just 88 contracts in the strike. Accordingly, we can easily confirm that this was an opening long position looking to profit from an immediate move higher in LULU with only about one and a half trading sessions remaining before tomorrow’s weekly options expiration. Literally minutes after this large block buy, LULU stock spiked sharply higher through 65.50, printing as high as 68.00 as rumors of a potential buyout from V.F. Corporation hit the street. These options printed as high as 2.00 on this spike higher, making this a hugely profitable potential trade if entered based on the initial OptionHacker alert sent out this morning. As the rumors settled however, LULU share prices have quickly fallen back to trading levels we saw earlier this morning. We will continue to monitor this option position as we move into tomorrow’s expiration to see if the stock can push back higher over the 66.44 break-even point (before commission costs) for this trade.

Trade: A trader bought 1,545 LULU Mar 6th Weekly 66 calls for $0.44
Risk: $44 per 1 lot
Reward: Unlimited
Breakeven: $66.44

These calls traded as high as $2.00 today making this trade an absolute blowout winner.

Andrew Keene

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