Option Trader Selling The Yeti Bounce

Yeti Holdings Inc YETI shares are down more than 20% since the beginning of May. While Americans are getting their coolers out for the summer, one large option trader threw in the towel on Yeti on Monday.

The Trade

On Monday morning around 9:32 a.m., Benzinga Pro subscribers were alerted to a sale of 2,210 Yeti call options at a $30 strike price that expire on July 19. The calls were sold at the bid price of 57.8 cents and represent a $129,727 bearish bet that Yeti shares will still be trading below $30 roughly one month from now.

Even traders that focus exclusively on the stock market watch the options market closely to gain insight into what option traders may be thinking. Due to the relative complexity of the options market, options traders are generally seen as more sophisticated than the typical stock trader. Large options traders are often institutions or wealthy individuals that may have a unique perspective and/or advanced information on a given stock.

Sell The Bounce?

Yeti has endured heavy selling pressure ever since the company disappointed the market with its first-quarter earnings report and guidance. Shares have rebounded 6.4% in the past week after CNBC's Jim Cramer said the stock is “terrific and undervalued” earlier this month.

Monday morning’s large call seller appears to see things differently, taking advantage of the bounce to scale down his or her long option position in Yeti.

Unfortunately, there’s no way to be 100 percent certain whether the buys are a standalone position or a hedge against a larger stock holding. Given Monday’s trade was under $130,000 in size, it is unlikely to be a hedge in this instance.

Yeti's stock traded around $27.10 per share at time of publication.

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Photo credit: Zachary Collier, Flickr