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Whole Foods puts surge at highs

Chris McKhann (chris.mckhann@optionmonster.com)

The big option trade in Whole Foods today is preparing for a possible drop.

optionMONSTER's Depth Charge system shows that a trader bought 7,000 May 52.50 puts for the ask price of $2.09 and sold the same number of the May 67.50 calls for their bid price of $2.74. The volume indicates new activity, as the previous open interest at each strike was below 200 contracts, so this is a new position.

This could be an outright bearish play with the trader taking in a credit of $0.65, which would be kept as profit if WFM remains between those two strikes. It could also be a hedge against long shares , to protect against a decline in low-cost way. (See our Education section)

WFM is up 0.83 percent to $61.69, a new all-time high for the stock. The upscale grocery chain was down at $52 at the end of August.

About 18,500 WFM options have traded, 5 times its daily average for the last month.

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