Put Buyers Busy as Whole Foods Market, Inc. (WFM) Topples $50

Whole Foods Market, Inc. is back above $50 for the first time since May

Digital Content Group
Dec 30, 2014 at 2:20 PM
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Whole Foods Market, Inc. (NASDAQ:WFM) finally muscled its way back atop the round-number $50 mark, putting it in territory not seen since early May. At last check, the grocer's shares were 1.6% higher at $50.52. This notable move is being met with plenty of options activity.

Diving right in, the stock's options are crossing at nearly triple the average intraday pace, with calls and puts trading near parity. Short-term strikes are in high demand, as well, per WFM's 30-day at-the-money implied volatility -- up 10.1% at 22.7%.

Specifically, buy-to-open activity appears to be transpiring at the January 2015 49-strike and 46.50-strike puts. In a nutshell, these speculators are aiming for WFM to tumble back below the respective strikes by the close on Friday, Jan. 16, when front-month options expire.

Alternatively, it's possible the put buyers are shareholders attempting to protect themselves against a pullback in the underlying. After all, WFM has rallied sharply over the last two months -- gaining 28.5% since the end of October. During that time span, the equity has outperformed the broader S&P 500 Index (SPX) by roughly 22 percentage points.

No matter their motive, today's put buyers have plenty of company. During the last 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Whole Foods Market, Inc. (NASDAQ:WFM) has racked up a put/call volume ratio of 0.74 -- in the 81st percentile of its annual range.

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