tradeMONSTER: Trade free for 90 days

Options Trading News

July 10, 2014  Thu 4:14 AM CT

SVU: SEE CHART GET CHAIN FIND STRATEGIES
Supervalu is drawing bullish option activity ahead of the grocery chain's earnings report in two weeks.

More than 5,500 October 9 calls traded for $0.40 to $0.45 yesterday, led by a print of 5,000 that was bought for $0.43, according to optionMONSTER's Heat Seeker tracking system. The volume was well above the strike's previous open interest of 1,488 contracts, showing that this is new positioning.

These long calls lock in the price where the stock can be purchased through mid-October no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $9. (See our Education section)

SVU rose 0.85 percent yesterday to close at $8.32. The stock has been trending higher since hitting a 52-week low of $5.38 in early February, and it is now back near its 52-week high of $8.76 reached last October.

Total option volume in Supervalu topped 6,800 yesterday, 5 times its daily average for the last month. Only 50 of those contracts were puts, a reflection of the session's bullish sentiment.
Share this article with your friends


Invest Like a Monster - Las Vegas: March 13-14

Premium Services

Archived Webinar

The Art of Trading: Forgiving the Spread

Education & Strategy

Know thy Greeks!

One of the most important roles played by the Option Pricing Model is the calculation of an important family of...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER