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On Tuesday, pet food titan Ralston Purina Group (RAL – 31-5/8) shot up nearly 28 percent on extremely heavy volume following news that it was being acquired by international confectioner Nestle. The stock has continued to trend in new high territory throughout this week's trading.
Yesterday, options players got into the mix, actively trading the June 22-1/2 and June 30 calls. 2,300 contracts changed hands at the 22-1/2 strike, while a notable 8,447 contracts were executed on the closer-to-the-money option. Prior to yesterday's trading, the June calls were home to 1,000 and 6,070 open contracts, respectively. Open interest at these strikes now stands at 3,300 and 12,295, indicating that nearly all of yesterday's volume was new positions. A number of large block trades crossed the tape throughout the trading session yesterday. Some were indicated as spread strategies between the two call options.
RAL shares are trading slightly higher today after Bear Stearns initiated coverage with a "buy" rating on RAL's offspring, Energizer Holdings (ENR – 23-7/16).