Agriculture Stock Hits Record High as Crop Prices Spike

Options traders are blasting ADM today

Deputy Editor
Mar 7, 2022 at 10:58 AM
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Archer-Daniels-Midland Co (NYSE:ADM) is trading at new record levels today, last seen up 6.1% at $87.85. The equity is in focus due to surging crop prices, as supply chain fears emerge amid the Russia-Ukraine crisis.

ADM kicked off March on a high note, after logging its third-straight monthly gain. The 100-day moving average has been supporting the shares since early October, and was able to contain their December pullback. Year-to-date, Archer-Daniels-Midland stock is already up 29.4%. The equity is due for a short-term dip, however, as its 14-day Relative Strength Index (RSI) of 76.4 sits firmly in "overbought" territory. 

Calls have been winning out in the options pits, per ADM's 10-day call/put volume ratio of 6.94 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 86% of readings from the past year, indicating a stronger-than-usual penchant for calls. 

Drilling down to today's options activity, 13,000 calls and 2,536 puts have been traded so far, which is 11 times what is typically seen at this point. Most popular is the June 95 call, where new positions are currently being bought to open, followed by the March 84 call.

These options traders are in luck. The stock's Schaeffer's Volatility Scorecard (SVS) sits at a 95 out of 100, meaning the security has exceeded option traders' volatility expectations during the past calendar year.


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