Aussie retailers...latest options action

by Raymond Chan

Following my post on the Aussie retailers on 19 Sep below, they had had very strong recovery.

19 Sep: "What's interesting though, was end of August and early September when the XJO was trying to break above the 4300; where it closed at 4396 and 4307 respectively. On those 2 days, trading in call options on those three names, MYR, HVN and DJS, increased.

This action is suggesting to me that these retailers are some of the names that the market is using as leverage to a recovery in the market."

As of last Friday 4 November, some strong put options on DJS were traded on Friday.

With DJS having put in more than 30% in the last 6  weeks from late Sep (rallied from $2.64 to $3.52), this had been very stong performance in the short term. Though this is not unique to DJS as most retail stocks had good rallies in that period, even MYR for example returned 24% in the same period, but options actions in DJS is suggesting profit taking is setting in. 

On Friday, the large quantities of puts traded appeared to be closing of bullish put spread of $3.20 and $2.80 strikes, indicating that some are locking good profits on the retailers.

Time to lock in profits in retailers.

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