Pilgrim's Pride draws late buyers
Mike Yamamoto | [email protected]
Nearly 3,600 November 12.50 calls were purchased for $2 to $2.60 in the last half-hour of Friday's session, optionMONSTER's Heat Seeker tracking system shows. This is clearly fresh buying, as open interest in the strike was just 240 contracts before the trades appeared.
These long calls will track shares closely because they are in the money and will lock in the purchase price for the stock no matter how far it might climb. But the contracts will quickly lose value if PPC doesn't climb soon, as they will expire in less than three weeks. (See our Education section)
PPC rose 0.42 percent on Friday to close at $14.45. The stock slipped below its 50-day moving average early this month and fell sharply along with other chicken producers after some Costco stores issued a recall over fears of salmonella contamination on Oct. 18.
The company is scheduled to announce third-quarter results on Thursday before the market opens.
Total option volume in PPC topped 6,700 on Friday, 16 times its daily average for the last month. Only 572 of those contracts were puts, a reflection of the session's bullish bias.