• 
• See all for optionMONSTER
• View Print Version

• Bulls target Safeway before earnings
• Trader bets that IGT levels will hold firm

• HOGS 75% Rate It

Chinese food company Zhongpin has been basing out for the last year, and now investors apparently think it's on solid ground.

optionMONSTER's tracking programs detected the sale of about 1,600 August 10 puts for $0.15 to $0.30 against open interest of just 100 contracts. There was also unusual activity in the September 10 puts, but volume was below open interest in those.

HOGS, which produces pork along with prepared foods and vegetables, ripped higher as the puts changed hands and is up 7.2 percent to $10.72 in afternoon trading. The shares fell last year as sentiment turned bearish toward Chinese stocks, and they have been slowly working their way higher since.

By selling puts , the investor is agreeing to buy shares for $10 if they fall below that level on expiration. He or she is essentially betting that they won't go down, and wants to earn income from that belief. (See our Education section)

HOGS received a potential takeover offer in March for $13.50 a share and is now trading below its book value. That could make some investors think that downside is limited from here.

Overall option volume is 21 times greater than average so far today.

Related Options Articles

• 
  Positive Economic Data Lifts Stocks to Strong Weekly Finish
  5/17/2013 04:23 PM
• 
  Barrick Gold Corporation Bombarded by Call Buyers
  5/17/2013 03:10 PM
• 
  Buyers can't get enough of T-Mobile
  5/17/2013 01:20 PM