$92M Contract Rewards Amira Nature Foods Ltd (ANFI) Shareholders, Call Buyers

Amira Nature Foods Ltd (NYSE:ANFI) has reached a $92 million contract with a repeat customer

Dec 31, 2015 at 10:39 AM
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Amira Nature Foods Ltd (NYSE:ANFI) is sizzling this morning, after the Indian rice company said it has secured a $92 million contract with a repeat customer in Europe, Africa, and the Middle East. By the numbers, the stock is up 8.3% at $9.53, bringing its quarter-to-date gain north of 72%.

Option traders have been betting bullishly amid ANFI's rapid ascent. Specifically, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 10-day call/put volume ratio of 9.81 -- with long calls outweighing puts by a nearly 10-to-1 margin. If that's not enough, this ratio ranks near the top quartile of its annual range.

On the flip side, short sellers have been piling on ANFI, with over one-fifth of its float sold short. In fact, at the stock's average trading levels, it would take nearly 12 sessions to cover these positions. It's possible some of the recent call buying is the work of these short sellers hedging their bearish bets against extended upside -- a smart strategy, considering today's bullish gap.

As alluded to, Amira Nature Foods Ltd (NYSE:ANFI) has had a masterful fourth quarter, riding atop support from its 32-day moving average. However, it's worth keeping in mind that the shares have still surrendered about one-third of their value on a year-to-date basis -- making the skepticism witnessed among short sellers a little more understandable.

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