Whole Foods Market, Inc. (WFM) Bulls Bet On a Bounce

Whole Foods Market, Inc. (WFM) traders are buying April calls

by Griffin Kruse

Published on Mar 18, 2015 at 2:33 PM
Updated on Jun 24, 2020 at 10:16 AM

Since notching an annual high of $57.57 in mid-February, Whole Foods Market, Inc. (NASDAQ:WFM) has taken a breather, down 6.6% to flirt with $53.78. Nevertheless, bullish activity in the options pits is ramping up, with speculators gambling on WFM to resume its journey to new highs in the next month.

In afternoon action, calls are changing hands at three times the average daily rate, and have more than quintupled puts in volume. Today's most active contract is by far the April 55 call, which is seeing a large amount of potential buy-to-open activity. By purchasing this call, traders expect the security to muscle north of the strike by the close on Friday, April 17, when the options expire. Meanwhile, more aggressive traders are seemingly buying to open the April 57.50 call, amid expectations for WFM to take out its annual high.

However, today's appetite for calls marks a change of pace. Prior to today, puts have been more prominent than usual, as WFM's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.72 sits in the 77th percentile of its annual range. Echoing this sentiment is the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.92, which reads higher than 82% of all similar readings taken over the past year. Simply stated, short-term option players are more put-focused than they have been over the past year.

Elsewhere, the brokerage bunch is divided on Whole Foods Market, Inc. (NASDAQ:WFM), as just over half of covering analysts rate the stock a "hold." In addition, WFM's consensus 12-month price target of $55.80 is just a chip-shot away from current trading levels.

Daily Chart of WFM Since September 2014

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