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Dole Food attracts last-minute buying

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Shares of Dole Food have been on a roller-coaster ride in the second half of 2012, but traders apparently believe that the stock will climb in the next five months.

More than 5,000 April 12.50 calls were purchased in a 3-minute span in the last hour of trade on Friday, led by two blocks of 2,000 that went for $0.75 and $0.80, according to optionMONSTER's Heat Seeker real-time tracking system. The volume was more than double the open interest in the strike at the beginning of the day, so this is fresh buying.

DOLE rose 0.53 percent on Friday to close the week at $11.48. The fruit and vegetable distributor saw a huge run-up earlier this year, surging from below $9 to above $14 between mid-July and mid-September along with bullish option action as it sold two of its business units. The stock then fell sharply in early October but has been trying to rebound in recent weeks.

The long calls bought on Friday are looking for the stock to gain roughly 16 percent by mid-April next year. These options could be sold earlier if their premiums rise with any rally in DOLE, but the contracts will be worthless if the stock is below the $12.50 strike price at expiration. (See our Education section)

Total option volume in the name on Friday was more than 4 times its daily average for the last month. Only 194 puts traded in the entire session, a reflection of the bullish sentiment.

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