Andrew Houghton and Nick Atkeson

   

Pacific Sunwear (PSUN) is a specialty retailer focused on the action-sport casual apparel, mainly surfing and skateboarding.

The daily trading volume in the options is about 2,500 contracts. Today, 15,000 contracts have traded, almost all puts. Specifically, market participants have traded 8,100 of the PSUN May 12.50 Puts (PVQEV) and also a few lines in the June puts.

The company is scheduled to report their April quarter the week of May 21, which happens to fall after the May expiry. So, one has to ask, why the bearish sentiment? Is the tide going out?

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