CROX- For traders who have portended the waning appeal of synthetic clog maker Crocs, today’s lowering of the company’s Q1 forecast on lower sales simply states a truth long deferred for the trend shoe – namely, that Crocs are a fad and that fads tend to fall by the wayside.
To be sure, there’s something about the immediate 43% drop in Crocs share price to $10.14 that smacks of a pent-up desire to sell the stock. Peril is written all over the elevated implied volatility reading in Crocs options, which shows a 28% higher risk premium being priced into Crocs shares over the next month than the historical record would otherwise justify.
While fresh two-way traffic in April 10 puts suggests traders gaming either side of Crocs’ fate, the fact that April 12.50 calls were freshly shorted on a total volume of more than 6,000 lots suggests a measure of confidence that Crocs shares won’t manage even a feeble recovery from current depressed levels.
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