Options Trading News

May 17, 2013  Fri 3:47 AM CT

Shares of Supervalu have more than doubled this year, and call buyers are shopping for more upside in the supermarket chain.

More than 10,200 July 7 calls traded in a heavy buying pattern yesterday, led by two prints of 3,900 that went for $0.40 and $0.35, according to optionMONSTER's Heat Seeker system. The volume is well above the strike's open interest of 6,060 contracts before the session began, indicating that these are new positions.

SVU fell 4.7 percent yesterday to close at $6.69 but is up more than 160 percent since starting 2013 around $2.50. The stock spiked higher after its last earnings report on April 24.

Yesterday's long calls, which lock in the price where traders can buy the stock no matter how far it might rise, are looking for SVU to gain roughly 10 percent or more by mid-July. These options could be sold at a profit earlier if their premiums rise with a rally before then, but they will expire worthless if the stock remains below the $7 strike price. (See our Education section)

About 19,000 total options changed hands in the name yesterday, more than double its daily average in the last month. Calls outnumbered puts by more than 6 to 1, further indication of the session's bullish sentiment.
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