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Elizabeth Arden Put Option Activity Revisited

It’s an ugly day for investors in Elizabeth Arden, with shares in the name losing roughly one-quarter of its value overnight after the retailer of beauty products and fragrances reported a wider than expected loss and sales that were lower than analysts anticipated. Shares in the name are down more than 23% in the final hour of trading to stand at $14.95.

On Friday of last week we wrote a short note about put option activity on the stock, highlighting activity in the Sep 20.0 strike put options. At the time, shares in RDEN were hovering near $20.17 and the company was a few days away from reporting fourth-quarter earnings. On Friday, it looked like bearish positions were building on RDEN as around 1,500 of the 20.0 strike puts looked to have been purchased at a premium of $1.50 each. The sharp drop in Elizabeth Arden shares today pushed premium on the contracts to more than three times that level during the session. Trading action in the 20.0 puts on Tuesday suggests profit-taking may have kicked in as 1,500 of the puts appear to have been sold at a premium of $5.10 each within the first 30 minutes of the opening bell today.


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