Call Buyers Stay Busy as Whole Foods Market, Inc. (WFM) Pops

Whole Foods Market, Inc. (WFM) is being targeted by long-term option bulls

Digital Content Group
Jan 21, 2015 at 11:08 AM
facebook twitter linkedin

Whole Foods Market, Inc. (NASDAQ:WFM) is rallying this morning on the heels of an upgrade to "buy" from "neutral" at Sterne Agee. In addition, the brokerage firm set a price target of $60 -- in annual-high territory -- and lifted its earnings estimates for this year and next. At last check, the shares were up 3.1% at $52.92. Accordingly, call volume has exploded, running at more than triple the expected intraday rate.

Digging deeper, we see that long-term bulls have been active. Specifically, WFM's most active option is the January 2016 40-strike call. While these contracts are currently deep in the money, the traders are looking for the stock to muscle atop the at-expiration breakeven mark of $54.49 (strike plus the volume-weighted average price of $14.49) by the close on Friday, Jan. 15, 2016 -- when the LEAPS cease trading.

From a slightly wider perspective, call buying has picked up in recent weeks. Specifically, during the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WFM has racked up a call/put volume ratio of 3.82 -- higher than 88% of all comparable readings from the last year.

This rush of bullish betting comes amid the stock's recent display of technical strength. Since bottoming in the $36 area in mid-October, Whole Foods Market, Inc. (NASDAQ:WFM) has surged nearly 47% -- helped by an earnings-induced bull gap in early November.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1