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Large upside strategy in Mondelez

David Russell (david.russell@optionmonster.com)

Mondelez International is drawing a big upside trade as the food stock consolidates at key support.

optionMONSTER's Heat Seeker monitoring program detected the purchase of some 10,200 December 32 calls for $1.11 and the sale of an equal number of December 28 puts for $1.18. The trader also purchased some 10,200 December 24 puts for $0.42. Volume was more than 9 times the previous open interest at all three strikes, clearly showing that these are new positions.

The strategy combines a put credit spread with long calls to leverage a move to the upside while limiting downside risk. It cost $0.35 to open the trade, with a maximum loss of $4 on a drop to $24. Anywhere above $32.35 is pure profit. (See our Education section)

MDLZ is up 2.31 percent to $30.50 and is rebounding after pulling back to its 100-day moving average. Some chart watchers could consider that evidence of a bullish uptrend and look for the shares to keep advancing.

The company owns brands formerly under the Kraft umbrella such as Oreo, Ritz, Nilla, and Chips Ahoy. It's also heavily focused on international markets.

Total option volume is more than twice the daily average so far in the session, according to the Heat Seeker.

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