Traders are looking for Campbell Soup to rally in coming months.
optionMONSTER's market scanner shows that more than 6,500 May 65 calls were purchased for $0.90 to $1.35 yesterday. These are clearly new positions, as open interest in the strike was only 748 contracts before the session began.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
CPB rose 0.57 percent to $61.46 yesterday and is up 15 percent in the last three months. The soup company reported bullish results on Feb. 16 and is scheduled to announce its next earnings numbers before the market opens on May 20. Yesterday's long calls expire at the end of that session.
Overall option volume in CPB was 5 times greater than average yesterday. Calls outnumbered puts by a bullish 4-to-1 ratio.
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