Lululemon Athletica (LULU, news, chart) is seeing active trading on takeover speculation. The stock is up $1.13, or 5.3 percent, to $22.35 on talk Nike (NKE) might be looking at the company. In the options market, sentiment is bullish, with 5,500 LULU calls and only 600 puts trading on the day. However, with a lot of volume and open interest in the August options, which have less than two trading days of life remaining, the action isn’t too convincing. It is probably tied to the expiration (trying to boost shares ahead before August options come off the board) because if there was any real substance to the speculation,one might expect to also see greater interest in options that expire in September or later.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.