Whole Foods Market, Inc. (WFM) Calls Hot Amid Buyout Buzz

Whole Foods Market, Inc. (NASDAQ:WFM) calls are trading at six times the average intraday pace

Apr 27, 2015 at 12:59 PM
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Rumors are circling the Street that Whole Foods Market, Inc. (NASDAQ:WFM) is once again being pursued as a possible takeover target for Publix Super Markets, Inc. The stock is failing to capitalize on the unconfirmed speculation, however, and was last seen 1.3% lower at $48.97. Option traders are keeping the faith, though, and are scooping up calls at six times what's typically seen at this point in the day.

The equity's weekly 5/1 49.50- and 50-strike calls have seen the most action, with 10,637 contracts on the tape at last check -- about half of the total intraday call volume. By all accounts, new positions are being purchased, as speculators gamble on WFM rallying north of the respective strikes by Friday's close, when the weekly series expires.

Today's accelerated call activity marks a change of pace in WFM's options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.88 sits in the 78th annual percentile. Echoing this is WFM's Schaeffer's put/call open interest ratio (SOIR) of 1.02, which rests higher than 87% of similar readings taken in the past year. In other words, short-term speculators are more put-heavy than usual toward the security.

Technically speaking, Whole Foods Market, Inc. (NASDAQ:WFM) has done little to write home about in recent months. In fact, since hitting an annual high of $57.57 in late February, the shares have surrendered 15%. Additionally, the stock has underperformed the broader S&P 500 Index (SPX) by nearly 13 percentage points over the past two months.


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