Traders Betting Big on Tumi Holdings (TUMI) Using Options

Tumi Holdings, Inc. (TUMI) offers consumers a range of travel and business products and accessories. The company’s stock is currently trading around $20.70 in a 52 week range of $18.29-$25.47. The stock has been underperforming the market this year falling 12.77% year to date. The past 5 days have seen a bit of a rebound in shares however. The stock has rallied over 4.2% over the past 5 days and is seeing another pop today of 2.32%. Despite the more bearish longer term price action in TUMI, options traders are betting on a continued move higher through the end of the year.

Earlier today a trader bought 1,933 of the TUMI Nov 22.5 Calls for $0.90 when the stock was trading at $20.57. The stock rallied after the order hit the tape and this block represents orderflow 8.6 times the average daily options volume in TUMI. Nearly 2,500 contracts have traded on that line now and stock has traded as high as $20.72 on the session. These options have not managed to trade higher on the day but this is very unusual options activity in TUMI. This will now create the largest line of open interest in TUMI Nov options and this trader is likely expecting the stock to continue its recovery after rallying on earnings earlier this month. With options still trading at $0.90 this trade could represent an opportunity to get long TUMI on institutional orderflow.

Trade: A trader bought 1,933 TUMI Nov 22.5 Calls for $0.90
Risk: $90 per 1 lot
Reward: Unlimited
Breakeven: $23.40