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• Limited downside seen for J.C. Penney
• Consumer prices, industrial data on tap
• VIX futures, index close near day's highs

Kraft Foods is near an all-time high, and the bulls are hungry for more gains.

optionMONSTER's Heat Seeker tracking program detected the purchase of 7,500 December 42 calls for $0.80 and the sale of 7,500 December 39 puts for $1. The trader collected a credit of $0.20.

In addition to that initial amount, he or she now stands to earn highly leveraged profits if the food giant rallies into December. But the position also faces potentially huge losses on the short puts if the stock drops below $39.

KFT ended yesterday's session off 0.07 percent to $41.07. The stock is up 20 percent in the last year amid consistently strong financial results. It's also benefited from plans to spin off its grocery business and from a trend of investors shifting money into stocks that aren't sensitive to economic weakness.

Yesterday's bullish combination trade is similar to owning about 750,000 shares. The main difference is that the position will expire worthless if KFT remains between $39 and $42. Its benefits are that it cost nothing to open and will only register a gain or loss in the event of a move in the share price. (See our Education section)

Overall option volume was almost twice the daily average in the name, according to Heat Seeker.

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