Pilgrim's Pride has been on a huge run along with other poultry producers, and one trader is looking for more gains by the end of the year.
More than 7,600 December 15 calls have traded in a strong bullish pattern as premiums rose from $3.30 to $4.80, according to optionMONSTER's Heat Seeker tracking system. The volume was far above the strike's open interest of just 455
These long calls lock in the price where traders can buy the stock through mid-December no matter how far it might rise. They could be sold earlier at a profit if premiums rise with a rally before then, but they will rapidly lose value if shares fail to move higher. In either case, these calls will track the stock price closely because they are deep in the money . (See our Education section)
PPC is up 1.41 percent to $18.67 in midday trading, bucking the broader market's decline today. The stock gapped higher with its last earnings report on Aug. 1 and spiked to $19.23 two sessions later along with bullish option action , its highest price since June 2008, but have been trading sideways since. Shares have more than tripled since last October.
Total option volume in the name has topped 9,000 contracts so far, 10 times its daily average for the last month. Overall calls outnumber puts by a bullish 19-to-1 ratio.
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