Credit: Shutterstock photoTyson Foods dropped on a poor earnings report last week, but the bulls keep looking for a rebound.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 2,500 June 39 calls for $2.13. An equal number of 2,500 May 39 calls was sold for $1.80, but volume was below open interest in those.
The May contracts also expire today and are in the money . So, it appears that the investor owned the long calls as a cheap surrogate for the poultry company's stock, providing significant leverage because of their high delta. Rolling the position today cost $0.33 and prevents him or her from being assigned shares at the close. (See our Education section)
TSN has been explosive since November and is up 0.12 percent to $40.65 this afternoon. It gapped lower on May 5 after weak demand in China hurt profit, but revenue and guidance were strong and the stock quickly bounced at its 100-day moving average.
Total option volume is quadruple the daily average today, with calls outnumbering puts by a bullish 23-to-1 ratio.
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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.
