Put Options on VRA on 6/7/2013

Vera Bradley (VRA) designs, produces, markets, and retails accessories for women.

Its products include handbags; totes and specialty bags, such as crossbodies, baby bags, backpacks, and laptop portfolios; technology accessories and fashion accessories, including wallets, wristlets, eyeglass cases, cosmetics cases, and paper and gift products; and travel and leisure items comprising duffel bags, garment bags, rolling luggage, and travel accessories, such as travel cosmetic cases.

The company sells its products under the Vera Bradley brand to approximately 3,400 specialty retailers principally located in the United States, as well as department stores and third party e-commerce sites.

Shares have formed a bearish "flag" following the company's recent quarterly report and guidance. The company lowered its full-year guidance on top and bottom lines. It now sees EPS of $1.74-$1.78, down from $1.83-$1.88 previously, and dropped its revenue forecast nearly 3%, to $570-$575 million. Three brokerage houses (Robert W. Baird, Wells Fargo, and Piper Jaffray) downgraded the stock.

Last Trade: $20.55

Trade Buy 1 July $20.00 Put at $0.95 For a net debit of $0.95 Profit/Loss Analysis Breakeven at $19.05 Maximum profit is unbounded Maximum loss is ($95.00) at strike of $20.00 Closing Summary Sold 1 July $20.00 Put at $0.00

Position closed on 7/22/2013 at price of $0.00 with a -100.00% loss in 44 days.

Back to Portfolio