Kroger reports earnings tomorrow, and the bulls are shopping for profits today.
optionMONSTER's Heat Seeker trade scanner detected the purchase of about 3,400 December 25 calls for $0.55 against open interest of 1,129 contracts. There was also heavy activity in the January 25s for $0.85 and $0.90.
Those calls lock in the price where investors can buy stock in the Cincinnati-based grocer. They'll generate some nice leverage in the event of a rally but will lose money if the shares don't move sharply because option premiums tend to fall after big news events such as quarterly results when uncertainty is removed.
KR is up 0.44 percent to $24.97 in afternoon trading, continuing to trend higher since the summer. The company has done better than most of its rivals and raised guidance the last time it reported quarterly results in September.
Total option volume in KR is 16 times its daily average so far today. Calls outnumber puts by more than 7 to 1, reflecting the session's bullish sentiment.
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