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APRN Call Options Pop on Beyond Meat Buzz

Lillian Currens

Meal kit delivery service Blue Apron Holdings Inc (NYSE:APRN) announced that it will be rolling out a new vegetarian option in August, featuring Beyond Meat's (BYND) plant-based burgers. APRN stock is up 17% to trade at $8.97 in response -- on course for its best day since January -- and Blue Apron call options are flying off the shelves. 

On the charts, the equity is making a comeback after hitting a record low of $6.11 late last month. Since then, APRN has tacked on 47%, and is set to close above its 40-day moving average for the first time since early May. Nevertheless, the shares remain 40% lower on a year-to-date basis.

Considering its recent behavior, it's not surprising that analysts have remained cautious on APRN, with six "hold" ratings across the board. This could leave the door open for some upgrades, should APRN continue its recent upward trajectory.

Short interest, on the other hand, has taken a dramatic nosedive, down 87.8% in the last two reporting periods. Despite the recent exodus, the 1.77 million shares sold short still represent a solid 5.9% of the stock's available float. What's more, it would take almost seven days to cover all these pessimistic positions, at APRN's average pace of trading. 

As alluded to earlier, today's Blue Apron surge has call volume running hot. APRN has seen more than 2,600 calls cross the tape in the first hour of trading -- 45 times the average intraday pace. For comparison, fewer than 600 APRN puts have traded. Most active are the July 9 and 9.50 calls, where buy-to-open action is detected. By purchasing the calls to open, the buyers expect APRN shares to muscle north of the strikes by the close on Friday, when front-month options expire.