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Option Brief: SUPERVALU INC. (NYSE:SVU) has been on a mad tear in 2013, gaining nearly 220% to its present perch at $7.85. Thursday -- after taking its turn in the earnings confessional -- the stock caught the attention of options speculators, who traded 31,000 calls (more than 12 times what trades on an average day) and fewer than 2,500 puts.
Among the most active strikes were the October 8 and November 8 calls. Blocks of 6,000 contracts traded simultaneously on these strikes and crossed, respectively, near the bid and the ask prices. Data from the International Securities Exchange (ISE) indicates the front-month calls were sold to close, while the November options were purchased to open. Overnight open-interest translations confirm the same.
With October options expiring at the end of today, this SVU bull is extending his bet by opening long calls in the back-month series as a replacement. The November-dated options were bought for $0.47 apiece, making the breakeven price $8.47 (strike plus premium paid) at expiration, or 7.9% north of current levels.
As noted, SUPERVALU INC. (NYSE:SVU) announced earnings yesterday morning, topping expectations by 2 cents per share. A price-target hike from Guggenheim followed in after-hours trading.
For additional information -- including charts and sentiment indicators -- check out our SUPERVALU INC. (NYSE:SVU) quote page.