Markets

Bulls charge Kroger's checkout line

Traders are shopping for a rally in Kroger.

The supermarket chain's stock has been consolidating at the top of its range recently and refusing to drop below its 200-day moving average. optionMONSTER's Heat Seeker tracking system lit up late yesterday as investors purchased more than 3,900 January 24 calls against open interest of just 1,384 contracts.

Most of the trades priced for $0.45 and $0.50. These long calls lock in the price investors must pay to buy KR shares, so they can really move if the stock pushes higher. (See our Education section)

KR ended the session down $0.72 percent at $23.52. It has struggled for years with low margins and stiff competition, but its last earnings report on Dec. 1 was strong as same-store sales improved.

Overall option volume in KR was 8 times greater than average yesterday, with calls outnumbering puts by 62 to 1 in a reflection of the bullish sentiment.

(A version of this post appeared on InsideOptions yesterday.)

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


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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