Campbell Soup is just slipping off Friday’s 52-week highs, and traders are looking for volatility to increase.
A single print in the January 35 puts dominates today's option activity, with 2,000 purchased at the $1.85 bid price. The previous open interest was just 55 contracts, so this is a new position.
Less than a minute later, the biggest stock transaction of the day -- by a factor of 10 -- occurred, with 112,000 shares bought for $34.72. That suggests the option trade was a delta-neutral strategy designed to profit from a spike in volatility rather than a move specifically up or down.
Owning both puts and shares makes the investor directionally neutral. They now stand to make money from the food stock moving more than is currently implied by the option premiums. If big swings don't occur, they stand to lose money from the passage of time.
CPB fell 0.24 percent to $34.72 in afternoon trading. Today's delta-neutral trade pushed total option volume to more than triple the daily average.
More From optionMONSTER
Yahoo Inc will buy blogging service Tumblr for $1.1 billion cash, giving the Internet pioneer a much-needed social …