(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
ConAgra fell with the broader market yesterday, but some traders were hungry for a rally.
optionMONSTER's Heat Seeker system shows that 25,000 January 46 calls were purchased yesterday, mostly for $0.60. Volume dwarfed previous open interest of 309 contracts, an indication new money was put work.
Long calls lock in the price where investors can buy shares, allowing them to profit from a rally with limited risk. Their cheap cost can also generate significant leverage on a percentage basis if the stock moves higher. (See our Education section)
CAG dropped 7.08 percent to $39.40 yesterday. While earnings beat expectations, management warned that it may suffer from unfavorable currency moves. The company is also in the process of selling its private-label food business.
Yesterday's selloff brought the company back near its 200-day moving average the same area where it peaked in May. That could make some chart watchers expect a bounce.
Overall option volume was 51 times greater than average in the session, with calls accounting for a bullish 88 percent of the total.
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