OptionsHouse

Options Trading News

November 28, 2012  Wed 12:19 PM CT

KR: SEE CHART GET CHAIN FIND STRATEGIES
Kroger reports earnings tomorrow, and the bulls are shopping for profits today.

optionMONSTER's Heat Seeker trade scanner detected the purchase of about 3,400 December 25 calls for $0.55 against open interest of 1,129 contracts. There was also heavy activity in the January 25s for $0.85 and $0.90.

Those calls lock in the price where investors can buy stock in the Cincinnati-based grocer. They'll generate some nice leverage in the event of a rally but will lose money if the shares don't move sharply because option premiums tend to fall after big news events such as quarterly results when uncertainty is removed.

KR is up 0.44 percent to $24.97 in afternoon trading, continuing to trend higher since the summer. The company has done better than most of its rivals and raised guidance the last time it reported quarterly results in September.

Total option volume in KR is 16 times its daily average so far today. Calls outnumber puts by more than 7 to 1, reflecting the session's bullish sentiment.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

Continue to melt up? Think debit call spreads

The U.S. equities market is continuing to melt up. Even though the labor market is stagnant, the Fed keeps hinting that a short term interest rate hike is coming sometime soon.

View more education articles »