American Eagle Outfitters (AEO) is reeling after lowering its fourth quater earnings guidance and some investors are selling at-the-money puts on the stock. Shares of the apparel retailer are off $2.16 to $13 and the top options trade is a 3500-lot of Jan $13 puts at 40 cents on ISE, where data is reporting a closing seller. However, some of the flow is likely opening. 11,450 traded (73 percent Bid) against 7,928 in open interest. Meanwhile, implied volatility in the options on AEO is falling 5.5 percent to 35.5.