Best Stock on the Market

Put Options on CHS on 8/27/2013

Broken Support on CHSChico’s FAS (CHS) operates as a specialty retailer of private branded, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items in the United States.

The company’s portfolio of brands consists of Chico's, White House|Black Market (WH|BM), Soma Intimates (Soma), and Boston Proper. The Chico's brand sells private branded clothing; and accessories, such as handbags, belts, scarves, earrings, necklaces, and bracelets focusing on women of age 40 and over. The WH|BM brand sells private branded clothing; and accessories, including shoes, belts, scarves, earrings, necklaces, and bracelets focusing on women who are 35 years old and over. The Soma brand sells designed private branded lingerie, loungewear, and beauty products focusing on women who are 35 years old and over. Its products comprise bras, panties, shape wear, sleepwear, relaxed tops, bottoms, dresses, fragrance perfumes, and body care products. The Boston Proper brand sells women's apparel and accessories focusing on women between 35-55 years old through catalogs and online.

The company sells its products through retail stores, catalogs, and a call center, as well as through the Internet at chicos.com, whbm.com, soma.com, and bostonproper.com. As of February 2, 2013, it operated 1,357 stores in 48 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. 

Shares have fallen through several support levels and are now trading near their yearly low. We expect shares to continue to decline. Buyer Beware:  The retailer is scheduled to report earnings on August 28th. All the indications point to the firm reporting weak results.

 

52-Week Trading Range:   $15.36 - $19.95

Last Trade:  $15.45

 

Here is the trade:

Buy One September $16 Put Option for $1.00

Trade

  • Buy 1 September $16.00 Put at $1.00
  • For a net debit of $1.00

Profit/Loss Analysis

  • Breakeven at $15.00
  • Maximum profit is unbounded
  • Maximum loss is ($100.00) at strike of $16.00

Closing Summary

  • Sold 1 September $16.00 Put at $0.00

Position closed on 9/23/2013 at price of $0.00 with a -100.00% loss in 26 days.

Back to Portfolio