Cheesecake Factory, Inc. (CAKE) – Traders are loading up on Cheesecake Factory call and put options today, perhaps ahead of the restaurant operator's fourth-quarter earnings report next Tuesday. Shares in CAKE rose 1.6% to stand at $31.51 as of 12:55 p.m. in New York. March expiry calls garnered much of the attention from traders, with appetite for CAKE calls outpacing that of puts by around 1.4 to 1. The Mar. $34 strike calls are the most active as some 2,780 contracts changed hands against open interest of just 20 positions. It looks like the majority of the calls were purchased by one investor at a premium of $0.25 each. The strategist may profit at expiration in the event that Cheesecake Factory's shares rally another 8.7% to surpass the effective breakeven point and new 52-week high of $34.25. The same investor may also be responsible for the purchase of call options at the Mar. $33 strike, where roughly 750 contracts traded for an average premium of $0.54 apiece. Time stamps for trades in the Mar. $33 and $34 strike calls exactly match those of transactions in the Mar. $29 strike puts. Nearly 950 of the $29 strike put options were purchased for an average premium of $0.55. The strategist snapping up both call and put options on the stock is prepared to see CAKE's shares make big moves in either direction. The rise in demand for Cheesecake options has the overall reading of options implied volatility 31.5% on the day at 42.3% in early-afternoon trade.
Liz Claiborne, Inc. (LIZ) – Shares in the owner of Juicy Couture, Kate Spade and other retail-based premium brands rallied to a fresh 52-week high of $10.38 today, extending year-to-date gains to 23.4%. A spate of call buying on Liz Claiborne this morning may mean some options players are positioning for the shares to trade substantially higher by July expiration. Bullish trades on the name may be a vote of confidence in the Company's moves to turn-around struggling brands and reverse slipping sales figures. Juicy Couture, Liz Claiborne's largest unit by sales, posted a 7.2% YOY decline in sales in the third quarter. Earlier in the week, LIZ announced it has hired a new co-president and COO to get Juicy Couture back on track. LIZ is scheduled to report fourth-quarter earnings ahead of the opening bell on February 29. Options traders populating the stock concentrated their efforts in the July expiry.