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July 23, 2013  Tue 3:16 AM CT

SYY: SEE CHART GET CHAIN FIND STRATEGIES
Sysco is at a long-term high, and investors don't want their profits to disappear.

optionMONSTER's Depth Charge monitoring program detected the purchase of about 7,500 August 35 puts for $0.45. A similar number of August 34 puts were sold at the same time for $0.15, but volume was below open interest at that strike, which suggests that an existing position was closed and rolled higher.

Making the adjustment cost the investor $0.30 but raises by $1 the level at which he or she can sell shares in the food distributor. The trader probably owns the stock and is using the options as a protective strategy. (See our Education section)

SYY fell 0.8 percent to $35.74 yesterday but is up 24 percent in the last year. The stock is now stalling around the same level where it peaked in 2007, which could make some chart watchers think that resistance is in place.

The company hasn't yet announced the timing of its next earnings report, but last year's calendar suggests it will occur in mid-August, before yesterday's options expire.

Total option volume was 13 times greater than average in the session, according to the Depth Charge. Puts outnumbered calls by 32 to 1.
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Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

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