Unfortunately Juicy Couture is doing even worse than Lucky. It posted a 5.5% decline in revenue last quarter with flat sales despite numerous attempts to turn sales around by management. Just as bad, Fifth and Pacific attempted to reduce costs last year by hiring third-part distributors instead of company-owned distributors, but was forced to reverse course after complications with logistics and software.
Today, paper bought 13,629 FNP April 18 Puts for $.50. This was 17.6 times usual volume when the stock at $18.80. The chart looks bullish, and these are bought for 1 of two reasons. The trader that bought these Puts is buying $681,450 worth of Puts. Paper is just an order from a hedge fund, mutual fund, retail bank, or big trader. Puts are bought as Speculation to the downside, if this is true.
The Trade: Buying FNP April 18 Puts for $.50
Risk: $50 per 1 lot
Reward: $1750 per 1 lot
Breakeven: $17.50
If the Trade is bought as Insurance against a LONG Stock position at $18.80:
Risk: $130 per 1 lot
Reward: Unlimited
Breakeven: $19.30
—
Andrew Keene
President/Founder