Michael Kors Holding Limited (KORS) Sees Bearish Options Activity after Earnings

Michael Kors Holding Limited (KORS) is a major player in global luxury apparel and accessories. KORS is trading at $46.62 around the lower end of its 52 week range of $46.10-$98.96. Year to date the stock has underperformed the market by quite a bit selling off 37.91%. The stock dropped today by about 23.04% or $13.96. This move happened after KORS released disappointing earnings before the bell this morning

Early on a trader bought 9,000 of the KORS June 45.0 Puts for $0.35 when the stock was trading at $49.40. This order was recorded about an hour after the open on OptionHacker, and the stock dropped about $2.78 to $46.62 after the trade hit the tape. Over 16,300 have been traded today hinting at bearish sentiment. The KORS June 45.0 Puts for $0.35 have traded as high as $1.15 today making this a profitable trade. This trader is most likely establishing a short position expecting the stock to continue its bearish trend for a few weeks. This stock has been trading below the cloud for a few weeks now. The Ichimoku Cloud continues to grow and points the technical analysis in the direction of a bearish trend due to an increasing cloud size indicating a hard to reverse trend.

Trade: A trader bought 9,000 of the KORS June 45.0 Puts for $0.35
Risk: $35 per 1 lot
Breakeven: $44.65

If a trader bought a 20 lot of these puts they would have profited $1,600 at the highs on $700 in risk. A great example of profitable UOA.

Andrew Keene

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