The operator of Sweden’s H&M clothing chain said there was “no basis” to speculation it would bid for Gap Inc. (GPS) after bets on a potential takeover lifted the apparel chain’s call-options volume to a seven-month high.
Almost 49,000 calls to buy the stock changed hands as of 12:05 p.m. in New York, 21 times the full-day average during the past four weeks and 11 times the number of puts to sell. The shares rose as much as 3.5 percent to $23.73, the highest intraday level in a year. The most-active contracts were May $25 calls, which jumped 109 percent to 23 cents for the biggest gain among all Gap options and accounted for almost a third of call volume.
Traders are betting that H&M’s Stockholm-based parent, Hennes & Mauritz AB (HMB), may bid for the largest U.S. apparel chain, said Jamie Lissette, founder of Hammerstone Group, a Westport, Connecticut-based operator of online discussion forums for investors.
“I can say there’s no basis for this rumor,” said Haacan Andersson, an H&M spokesman. Louise Callagy, a spokeswoman for Gap, said the San Francisco-based company doesn’t comment on rumors or speculation.
Gap’s May $25 calls were today’s 11th most-active contracts on all U.S. options exchanges, according to data compiled by Bloomberg. The option had an open interest of 34 outstanding contracts before today.
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