Wednesday options trading was sloppy at times but there were a couple very large unusual options trades to talk about. Two of the bigger call buys were seen in Kate Spade & Co (KATE) and Cliffs Natural Resources Inc (CLF).
First up was a large call buy in Kate Spade & Co (KATE) Wenesday. One trader seems to “hope” for big things in the near future for KATE share price. He picked up 4,340 KATE April17 $15 calls at the ask price of $1.97. That equates to a pretty large bet of $855,000 that something good will be announced in the next 4 months regarding Kate Spade & Co.
During Wednesday trading Kate Spade & Co (KATE) shares traded down 22 cents to $15.29. So this trader has his work cut out for him to make some money on this large call buy in KATE.
As of this morning we’ve seen no big news out of Kate Spade & Co (KATE) but you rest assured there will be something. Kate Spade & Co announces Q4 earnings on February 23th which is a long ways away so not likely a factor in this traders call buying hunch.
The energy sector has seen a lot of action the past month or so, and it was time for some options action in Cliffs Natural Resources Inc (CLF) on Wednesday. One trader went out on a limb with the purchase of 5757 CLF April $13 calls at the ask of 72 cents. That limb better be supported by good old fashioned insider info, because that’s a bet of $415,000.
Yesterday, Cliffs Natural Resources Inc traded higher by 33 cents, closing the day at 9.64. So far in today’s premarket action CLF is down to $9.38 on just 400 shares. Given the current price of CLF shares, and the $13 calls bought, you have to assume there’s some very good news coming down the pipeline for Cliffs Natural Resources Inc, and unfortunately this trader is the only one who knows what it is.
We’ll be sure to update any developments on these interesting call buys in Cliffs Natural Resources Inc (CLF) and in Kate Spade & Co (KATE).