JNY – The Jones Group, Inc. – Shares in The Jones Group dropped 10% to $13.66 on Friday morning, the lowest level since July 3rd, after Women’s Wear Daily reported that G-III Apparel Group Ltd. is no longer seeking to acquire the company’s apparel business, citing two sources. The sharp move in the price of the underlying sparked heavy trading in JNY options straight out of the gate this morning, with upwards of 4,300 contracts traded as of 11:00 a.m. EST versus the stock’s average daily volume of around 2,000 contracts.
Fresh interest in Nov $14 strike puts on JNY suggests some traders are bracing for shares in the retailer to extend losses next week. More than 1,000 of the $14 strike puts have changed hands against open interest of 594 contracts, and much of the volume appears to have been purchased at a premium of $0.50 each. Buyers of the $14 puts stand ready to profit at expiration next week in the event that Jones Group shares settle below the breakeven price of $13.50.
