GES – Guess? Inc. – Shares in apparel and accessories retailer Guess are trading lower on Wednesday ahead of the company’s third-quarter earnings report after the closing bell. Options changing hands on the stock during morning trading indicates some traders are bracing for shares to potentially drop to the lowest level since early-October by December expiration. The stock currently trades down 2.0% on the day at $33.24 just before 11:30 a.m. EST.
Around 1,700 of the Dec $29 strike put options have changed hands on GES so far today, more than two times the open interest level at that strike of 780 contracts. Time and sales data suggests most of the $29 puts were purchased at a premium of $0.40 each, positioning buyers to make money if shares in Guess drop 14% from the current price of $33.24 to breach the breakeven point at $28.60 by December expiration.
Options volume on the retailer is roughly five times the average daily level ahead of the company’s earnings release, with volume currently up above 5,400 contracts versus average daily volume of around 1,060 contracts.
HPQ – Hewlett-Packard Co. – Options on HP are active today, with the price of the underlying stock climbing as much as 4.3% to a new 52-week high of $28.70 during morning trading. Overall options volume on Hewlett-Packard, currently hovering near 55,000 contracts as of the time of this writing, is more than 75% of the stock’s average daily volume of around 70,000 contracts. Trading in calls on the stock is far outpacing that of puts, with the call/put ratio hovering near 5.0 as of 11:20 a.m. EST.
