Traders cleaned up in a hurry yesterday with upside bets in food distributor Sysco.
optionMONSTER's Heat Seeker system detected the paper early as money flowed into the December 34 calls for $0.35 to $0.40. The stock had been consolidating since gapping higher on a strong earnings report earlier in the month, and yesterday's buyers are looking for a continuation of that move. They didn't have to wait long.
SYY paused for two hours, but then continued higher and ended the session up 1.12 percent to $34.16. Those calls, meanwhile, more than doubled to as much as $0.85.
The call buying worked because it allowed traders to lock in the price where they could purchase the stock no matter how far it climbs. Given that these contracts are inexpensive relative to the stock itself, even a small move in shares can result in tremendous leverage. (See our Education section)
Overall option volume in Sysco was 27 times greater than average, with calls accounting for a bullish 92 percent of the total.
(A version of this post appeared on InsideOptions Pro yesterday.)
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