I purchased 2 UA put options to hedge my $80 / 2018 call option. With UA’s earnings release coming up and the recent hit the stock price has been taking, I don’t want to be caught without protection should the stock continue to fall further. The put options expire Jul 15, 2016 / $50 strike. I believe in Under Armour’s ability to deliver but at this very moment the market seems to have other thoughts about the stock.
If we dip lower, especially with a severe market reaction to earnings… I think the stock might see low $60’s or even $50’s. Should that happen, I’m covered on any moves lower from here.
To stop the bleeding and move back higher, we’ll need UA to shut the market up with a killer earnings. I’ll wait for earnings to see how the stock is doing and make my next decision.