Put Options on AEO on 8/22/2013

American Eagle Outfitters (AEO) operates as an apparel and accessories retailer in the United States and Canada.

The company’s retail stores offer denims, sweaters, fleece, outerwear, graphic T-shirts, footwear, and accessories for 15 to 25-year old men and women under the American Eagle Outfitters brand name; and intimates and personal care products for girls under the aerie brand name.

As of February 2, 2013, it operated 893 American Eagle Outfitters stores and 151 aerie stand-alone stores, as well as 49 franchised stores in 13 countries. The company also sells and ships merchandise through its e-commerce Websites, including ae.com and aerie.com to 81 countries worldwide.

The firm reported quarterly results that missed the estimates and the firm guided lower. Since then, shares have fallen through major support levels. Lower prices are expected for this stock.

52-Week Trading Range: $14.33 - $23.94

Last Trade: $15.05

Here is the Trade:

Buy One September $16 Put contract for less than $1.10

Payout table is shown below.

Trade Buy 1 September $16.00 Put at $1.10 For a net debit of $1.10 Profit/Loss Analysis Breakeven at $14.90 Maximum profit is unbounded Maximum loss is ($110.00) at strike of $16.00 Closing Summary Sold 1 September $16.00 Put at $1.55

Position closed on 8/30/2013 at price of $1.55 with a 40.91% gain in 7 days.

Updates

8/30/2013 12:21:08 PM

We are closing AEO $16 Put option for $1.55

Back to Portfolio