Campbell Soup made a sharp move last week, and one investor is
positioning for more upside ahead of next week's earnings report.
optionMONSTER's tracking systems detected he purchase of 3,300 May
35 calls for $0.40 and the sale of an equal number of June 36 calls
for $0.35. Volume was below open interest in May but not in June,
indicating that an existing short position was rolled to the higher
The trade was likely the work of an investor who owns shares in the
food company and had sold calls against them. Yesterday's trade
cost $0.05 and will earn an additional $1 of upside on the stock.
If the calls hadn't been rolled, the trader would have been forced
to sell the shares for $35 on Friday.
CPB rose 0.51 percent to $35.28 yesterday and is up 6 percent in
the last month. Most of the move appears to have been technical,
rather than driven by news, after the shares found support above
their 50-day moving average.
The next big event is the release of fiscal third-quarter earnings
on Monday morning. The last report on Feb. 18 missed estimates and
management cut full-year guidance, but many food companies like
Heinz and Dean Foods have started rallying since then.
The call roll pushed total option volume in CPB to 9 times greater
than average in yesterday's session.
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