Traders apparently believe that long-term plans announced recently by Starbucks will begin paying off by the end of 2013.
More than 9,000 January 14 52.50 calls traded in a strong buying pattern on Friday, led by a single print of 8,386 that went for $6.80. That volume was well above the strike's open interest of 1,216 at the start of the session, so this is a new position.
SBUX slipped 0.11 percent on Friday to close at $53.64. Its shares have been on a wild ride, beginning the year by soaring some 37 percent to a 52-week high of $62 in April and then falling to $43 about 3-1/2 months later.
The ubiquitous coffee chain gapped back above $50 in early November after reporting strong earnings and raising its dividend. It then rose sharply above its 200-day moving average last Thursday when Robert W. Baird upgraded the name to "outperform" from "neutral," citing the company's recently announced long-term plans to expand domestically and overseas. (See our Education section)
Friday's in-the-money call buyers are counting on that blueprint to pay off in the next year, betting that SBUX will gain roughly 11 percent by expiration in early 2014. Those long calls could be sold at a profit before then if their premiums rise with any rally but will lose value if the stock doesn't rise.
Total option volume in the name was more than 70 percent higher than average on Friday. Calls outnumbered puts by more than 2.5 to 1.
More From optionMONSTER
- Big profits in Eastman Chemical trade
- Downside trade in Monster Beverage
- Call seller bets on ceiling in bond fund
- Investment & Company Information