Mike Khouw Sees Unusual Options Activity In Abercrombie & Fitch

On CNBC's Options Action, Mike Khouw spoke about options activity in Abercrombie & Fitch Co. (NYSE: ANF) after the stock dropped 16.62 percent on Friday.

Khouw said that more than four times average daily options volume was traded in the name on Friday and the most active was the November 28.5 put. Traders were paying $0.35 for the option and for this trade to be profitable the stock has to trade below $28.15, from its current price of $29.50, in just two weeks. Khouw added that the company reported fifth consecutive quarterly decline in revenue, which is a clear sign that there is a problem with demand for its products.

Carter Worth commented that from the technical standpoint the stock looks like it is going to break down once again. He thinks that it is going to $20 and that traders should avoid any temptation of buying the weakness.