At $1.1 billion market-cap, Aeropostale operates the mall-based casual clothing and accessories retail stores. The company has seen high
growth relative to its peers with expected sales up 4.3% since 2012. ARO’s operating margin showed a significant change of 16.11% compared
to the sector average of 10.92%.

Alongside the emergence of new international stores in Middle East and Singapore in 2012, the company also has prospects to break into newer
markets. ARO’s strategies to alleviate from the rising costs of production show strong signs of higher returns for upcoming quarters; making it a viable stock for the retail investor.

The Trade: Buying the ARO May 14 Calls for $.40
Risk: $40 per 1 lot
Reward: Unlimited
B/E: $14.40

Greeks of the Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

—
Andrew Keene
President/Founder
Andrew@KeeneOnTheMarket.com

Paper bought 4000 AMAT April 13 Puts for $.06 (2.1 times usual volume) when stock was trading $13.55
Paper bought 10,000 CY April 10 Puts for $.09 (3.4 times usual volume) when stock was trading $10.98
Paper bought 2751 KKR April 18 Puts for $.10 when stock was trading $19.03
Paper bought 1700 TSN April 23 Puts for $.15 when stock was trading $23.57
Paper bought 700 CCE April 36 Puts for $.15 (4.2 times usual volume) when stock was trading $36.67

Paper bought 1000 MDR May 11 Calls for $.30 (2.0 times usual volume) when stock was trading $10.30
Paper bought 4421 ARO July 13 Calls for $1.75 when stock was trading $13.98
Paper bought 8586 VIAB May 70 Calls for $.70 (6.6 times usual volume) when stock was trading $65.75
Paper bought 500 BVN Sep 25 Calls for $1.10 (7.7 times usual volume) when stock was trading $22.29
Paper bought 400 YHOKU April 18 Calls for $.15 when stock was trading $17.16

Paper bought 8586 VIAB May 70 Calls for $.70 (6.6 times usual volume) when stock was trading $65.75
Paper bought 4421 ARO July 13 Calls for $1.75 when stock was trading $13.98
Paper bought 96,000 S May 7 Calls for $.27 (14.7 times usual volume) when stock was trading $6.99
Paper bought 1070 MEOH May 40 Calls for $.65 (8.6 times usual volume) when stock was trading $37.51
Paper bought 2750 VHC April 19 Straddles for $2.00 when stock was trading $19.02

From a fundamental prospective, it seems as though every time the Japanese halt the bond market, USD/JPY moves higher. One could subscribe to the notion that investors, perhaps who wanted to sell, buy USD/JPY to get out of Yen. Additionally, maybe investors see the risk of devaluation or additional extreme policy implementation during the close of trade, therefore USD/JPY is a hedge. To the contrary however, the market is only paying 71 bps annually for Japan CDS… not seeing a lot of risk.

—
salerno.mark.a@gmail.com