Option Trade 
Kohl's Corporation (NYSE:KSS) Puts 
Wednesday, August 12, 2015

**OPTION TRADE: Buy the KSS Oct 2015 60.000 put (KSS151016P00060000) at approximately $2.20. Place a protective stop loss at $0.90, and a pre-determined sell at $4.50.

by Ian Harvey

August 12, 2015

Kohl's Corporation (NYSE: KSS), a family-oriented department stores that sell apparel, footwear and accessories for women, men and children; soft home products, such as sheets and pillows, and housewares, posts second-quarter results on Thursday. The company could lower its full-year forecast, analysts warn, after first-quarter sales and profit were hurt by colder-than-usual weather in February and West Coast port issues.

Kohl’s is pinning its hopes on its new strategic initiative, “Greatness Agenda” to drive comparable store sales in the soon-to-be-reported quarter.

However, rising apparel costs and declining gross margin remains a concern. The company also expects higher expenses related to the rollout of the beauty initiatives to hamper margins in the to-be-reported quarter, as it liquidates the old product to make way for the new one. Estimates have also decreased for second quarter 2015 over the past 30 days.

The stock price of Kohl’s Corporation increased 5.64% over the last 200 days, and is in weak up trend. In the last 50 and 100 days, Kohl’s Corporation is down 7.05% and down 18.67%, respectively.

Over the last six months, Kohl’s Corporation has had 5 insider sales worth $32.19 million.

As an example of the net money flow for Kohls – Monday saw a negative $(-1.35) million. The total inflow of $0.95 million in upticks was completely overshadowed by an outflow of $2.29 million in downticks, giving the up/down ratio a value of 0.41. The shares have seen a change of -1.53% in the past week.

According to data compiled by Thomson Reuters, Kohl’s Corporation’s stock is covered by 21 equity analysts across the Street, with 2 analysts giving it a Sell rating, 11 a Buy rating, while 12 consider it a Hold.

In an analyst report issued by Jefferies & Co on Wednesday, 8 July, Kohl’s Corporation had its price target cut to $72.00. The firm presently has a “Buy” rating on the stock.

Also, in a research note released to the investors, BMO Capital lowered its price target from $79 per share to $70 per share.

Harvey’s Options Volatility Indicator


Kohls Corporation has lost 2.12% during the past week and dropped 6.15% in the last 4 weeks. The shares are however, negative as compared to the S&P 500 for the past week with a loss of 0.88%. Kohls has underperformed the index by 6.19% in the last 4 weeks.

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the KSS Oct 2015 60.000 put (KSS151016P00060000) at approximately $2.20. Place a protective stop loss at $0.90, and a pre-determined sell at $4.50.

”Success is simple. Do what's right, the right way, at the right time.”

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Options traders win because they are successful.

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