Chiquita Brands International, Inc. (CQB) – Options traders breakfasted on Chiquita call options this morning despite the 4.2% drop in the price of the underlying to an intraday low of $14.90. The manufacturer of fresh produce opened higher, but quickly reversed course during the session and currently stands 2.5% lower on the day at $15.16 just before 11:45am. Chiquita’s shares slipped in extended trade yesterday after the firm’s fourth-quarter results missed estimates. Investors expecting the price of the underlying to improve in the next few months picked up in-the-money call options in the May contract. More than 3,280 calls changed hands at the May $15 strike versus previously existing open interest of just 352 contracts. The overwhelming majority of these calls appear to have been purchased for an average premium of $1.66 apiece. Call buyers make money in the event that Chiquita’s shares surge 9.9% over the current price of $15.16 to surpass the average breakeven point to the upside at $16.66 by May expiration. The overall reading of options implied volatility on CQB is down 20.6% to 52.63% post earnings.
"The top options trade of the day is a 1000 contract block of May 15 calls at $1.70 on ISE. It’s an opening buyer, according to ISEE data. 3,280 traded vs.352 in open interest, as some investor seem to view today’s weakness as an opportunity to buy in-the-money calls on CQB."