Lots of action in AEO Aug 18 calls
American eagle outfitters saw bullish call action into earnings today.? In two separate trades a trader bought 3500 of the Aug 18 calls for 1.00, on the day over 10,000 have traded almost all of them buyers.? Additionally a trader executed a buy-write in AEO buying stock and selling the Aug 18.5 calls at .6 2500 times.?
Both of these trades are bullish the underlying however they take different routes to getting there.? The call buyers are betting on a rise in the underlying of at least 1.00 over 18.00 which would mean the stock moving over 19.00 a share.? Thus bullish volatility and underlying.
The second trade is betting the stock will rally toward 19, but likely not much more.? In addition, it is still in the black if the stock backs off .60 below the purchase price of the stock which was around 18.20.? Making his or her downside around 17.60.? However, upside is capped at 19.10 in the name.