On the day over 15,000 LULU July 65 puts have traded.
Lululemon Athlietica Inc., trading 69.10 (up .96) with an IV30 of 29.27 and an HV10 of 18, reported earnings today.? The stock has an ADV of 12,100 and an OI of 187,000. Today, the volume is already about 5x as it reacts to earnings.? The major flow has been in July where is active July 65 put buying.? On the day over 15,000 of the July 65 puts have traded, with the largest blocks being 5,000 and 6,400 both traded on the ISE.
This is a customer who is fading the move, which has already backed off from the high.? The customer is thinking that the underlying is likely to fade back toward 65 or lower by the end of July expiration, which is about 45 days away from now.? The customer begins to do really well if the stock drops to 64, and this appears to be an outright, although it could be a near term hedge with the vol this low.
This trade is aggressively bearish the underlying and bullish volatility.