Dole has been falling all month, but traders are betting on a comeback ahead of the company's earnings report.
More than 6,000 November 12.50 calls were bought yesterday, including a print of 4,550 that went for $0.60 as shares climbed, according to optionMONSTER's Heat Seeker tracking system. The volume dwarfed open interest of just 350 contracts in the strike at the beginning of the day, clearly indicating new positions.
DOLE rose 0.25 percent yesterday to $12.21, its first positive close this month. Shares of the fruit and vegetable distributor spiked above $14 on Sept. 12 with news that it was in talks to sell two business units, which it eventually did about a week later. But the stock meandered sideways after that, falling sharply in October along with bearish option activity .
Yesterday's call buyers are looking for the stock to gain more than 7 percent by expiration on Nov. 16, the day many analysts are expecting the company to report third-quarter earnings. The premiums on those options could rise in the event of a rally before then, allowing traders to sell the calls at a profit earlier. If the stock is below the $12.50 strike price at expiration, however, those contracts will expire worthless. (See our Education section)
The trades pushed total option volume in DOLE to more than double its daily average. Overall calls outnumbered puts by 8 to 1, reflecting the session's bullish bias.
(A version of this post appeared on InsideOptions Pro yesterday.)
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