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Bears shopping at Whole Foods

Traders are bracing for more bad news from Whole Foods Market.

optionMONSTER's Depth Charge monitoring program detected the purchase of 5,500 Weekly 31 puts expiring next Friday, Nov. 6. They mostly fetched $1.08 to $1.20 and volume was more than 10 times previous open interest at the strike.

Long lock in the price where investors can sell a stock, so they make money to the downside. They can also be used in lieu of short selling because they limit upside risk and can generate significant leverage on a percentage basis if a drop occurs. (See our Education section)

WFM slid 1.35 percent to $32.10 on Friday and has lost most than half its value in the last two years. The organic grocer has been hammered by competition from mainline rivals such as Kroger, forcing management to cut prices. The stock gapped lower after the last two quarterly releases, and the next set of numbers is scheduled for Nov. 4.

Overall option volume in WFM was triple its daily average on Friday. Puts accounted for a bearish 73 percent of the total.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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