Implied volatility in Urban Outfitters (URBN) is up sharply this morning after the retailer’s CEO unexpectedly stepped down and Citi downgraded the stock to Sell from Buy. Shares are off $5.71 to $23.70 and options volume is running 9X the daily average. Mar 16 and 20 puts are the most actives and seeing some closing activity on the heels of the news. 3,261 Mar 20 puts traded against 9,336 in open interest — which is the largest open interest position in the name. Data indicates a firm is selling to close (2,250 on ISE so far). 4,515 Mar 16 puts traded vs. 7,598 in OI — 2nd largest — and data suggest a firm is buying to close (1500 contracts so far). Beyond that, the flow seems dominated by upside call buyers. Jan 24, 25, and 26s are the next most actives. Meanwhile, implied volatility in URBN options jumped 39.5 to 47, as players react to the suprirse announcement and big move in the underlying Wednesday.