Traders beef up on Herbalife options as shares extend losses

Williams-Sonoma, Inc. (NYSE:WSM) – Put options on the retailer of high-quality home goods are changing hands this morning, with shares in the name trading slightly lower on the session, down 0.20% at $44.54 as of 12:15 p.m. ET. Put buyers taking to Williams-Sonoma, Inc. (NYSE:WSM) in the early going appear to be positioning for shares in the name to pullback somewhat during the next four weeks. Traders appear to have purchased 1,000 in-the-money puts at the Jan. 2013 $45 strike for an average premium of $1.60 apiece. The bearish position starts making money if shares in the retailer slip 2.6% from the current level to breach the effective breakeven point on the downside at $43.40 by January expiration. The stock has rallied more than 30% since mid-January, although trades roughly 7% below the November 2nd 52-week high of $48.07 as of the time of this writing.

Caitlin Duffy

Equity Options Analyst

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