Put Options on ARO on 8/21/2013

Aéropostale (ARO) operates as a mall-based specialty retailer of casual apparel and accessories.

It provides a collection of apparel, including graphic t-shirts, tops, bottoms, sweaters, jeans, outerwear, and accessories for 14 to 17 year-old young women and men. The company also offers casual clothing and accessories focusing on kids between the ages of 4 and 12. As of July 1, 2013, it operated 898 Aeropostale stores in 50 states and Puerto Rico, 78 Aeropostale stores in Canada, and 132 P.S. from Aeropostale stores in 28 states and Puerto Rico.

In addition, Aéropostale, Inc. markets its products through its Websites, www.ps4u.com, and www.aeropostale.com, as well as, its licensees operate 29 Aeropostale stores, and 1 Aeropostale and P.S. from Aeropostale combination store in the Middle East, Asia, and Europe under various licensing agreements.

Shares have fallen through all supports after the retailer issued weak guidance yesterday.

52-Week Trading Range: $11.46 - $17.10

Last Trade: $11.75

Here is the trade: 

Buy One September $12 Put option for less than 90 cents.

The payoff table is shown below.

Trade Buy 1 September $12.00 Put at $0.90 For a net debit of $0.90 Profit/Loss Analysis Breakeven at $11.10 Maximum profit is unbounded Maximum loss is ($90.00) at strike of $12.00 Closing Summary Sold 1 September $12.00 Put at $1.40

Position closed on 8/22/2013 at price of $1.40 with a 55.56% gain in 1 days.

Updates

8/22/2013 2:08:13 PM

We are closing the ARO Put option at $1.40, one day after it was initated. ARO may move lower too but we elected to lock in profits.

Back to Portfolio