Options Intelligence Report: Dress Barn, Inc. (DBRN) & OmniVision Technologies, Inc. (OVTI)
DBRN ñ Dress Barn, Inc.
Bulls are trying call options on for size at Dress Barn today to position for shares of the operator of womenís apparel specialty stores to rally ahead of September expiration. Investors are likely taking bullish stance on DBRN ahead of the firmís fourth-quarter earnings report scheduled for release after the closing bell on September 15, 2010. Dress Barnís shares are currently up 0.30% to stand at $22.71 as of 12:30 pm ET.
It looks like traders picked up approximately 1,500 in-the-money calls at the September $22.5 strike for an average premium of $0.90 apiece. Call buyers profit if the retailerís shares rally 3.00% over the current price of $22.71 to exceed the effective breakeven price of $23.40 ahead of expiration next Friday. Options implied volatility on the stock is up 5.6% at 41.65% in early afternoon trading.
OVTI ñ OmniVision Technologies, Inc.
Shares in semiconductor image sensor devices manufacturer, OmniVision Technologies, fell as much as 7.2% in the first half of the trading day to reach an intraday low of $18.42, the lowest traded price since June 11. It looks like one options investor was prepared for the plunge in price and took profits off the table by rolling a previously established long put stance to a lower strike price in the October contract. The put player likely accumulated a total of 3,000 long puts at the October $24 strike for an average premium of $2.58 each starting on August 30, 2010, when OVTI shares were trading at a volume-weighted average price of $22.47. The subsequent erosion in the price of the underlying stock inflated premium on the deep-in-the-money puts. Thus, the investor was able to sell all 3,000 puts at that strike today at a richer premium of $4.70 a-pop. Net profits on the closing sale amount to an average of $2.12 per contract. Next, the trader braced for continued bearish movement in the price of OVTI shares by picking up a fresh batch of 3,000 in-the-money puts at the lower October $20 strike at a premium of $1.90 apiece. Profits on the new position start to accumulate for the investor if the semiconductor makerís shares fall another 1.7% from todayís low of $18.42 to trade below the average breakeven price of $18.10 by October expiration day.
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