Buyers can't get enough of Kate Spade
Traders were snapping up calls in Kate Spade on Friday for the second straight session.
optionMONSTER's tracking program detected the purchase of 6,000 October 20 calls for $0.90 to $1.05. Volume surpassed open interest of 1,339 contracts, showing that these are new positions, and follows large buying in the September 20 calls on Thursday.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
KATE rose 1.83 percent to $18.95 on Friday but is down 17 percent in the last three months. The handbag retailer reported bearish results on Aug. 3 and is expected to announce its next quarterly numbers in pre-market hours on Nov. 3.
Overall option volume in the name was twice its daily average on Friday. Calls outnumbered puts by a bullish 25-to-1 ratio.
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