OptionsHouse

Options Trading News

August 7, 2012  Tue 10:45 AM CT

KFT: SEE CHART GET CHAIN FIND STRATEGIES
Kraft Foods is near an all-time high, and investors are getting nervous.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 30,000 December 37 puts for $0.54 and the sale of an equal number of December 42 calls for $0.84. Volume was more than 19 times open interest at both strikes.

The trader probably owns shares in the consumer-staples giant and is using the options to protect against a drop. He or she collected a credit of $0.30 and stands to make money if the stock pushes toward or below $37. He or she is also obligated to sell their equity for $42 if the shares close above that level on expiration.

KFT, which has never traded above $41.50, is up 0.47 percent to $40.79 this morning. It has appreciated almost 17 percent in the last year as investors have flocked to low-risk companies with less exposure to a weak economy.

Overall option volume is more than 7 times greater than average in KFT so far today, according to the Depth Charge.
Share this article with your friends


OptionsHouse

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

View more education articles »