Bird Flu Scare Has Cal-Maine Foods, Inc. (CALM) Traders Busy

Cal-Maine Foods Inc (CALM) touched a record high earlier

May 11, 2015 at 2:10 PM
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Cal-Maine Foods Inc (NASDAQ:CALM) is among the session's biggest gainers, possibly due to an outbreak of avian influenza in the Midwest, which could lead to higher egg prices. As such, intraday call volume has spiked to six times what's expected, and the stock's 30-day at-the-money (ATM) implied volatility earlier notched an annual high of 54.9%.

Digging deeper, data from the International Securities Exchange (ISE) indicates positions are being bought and sold to close at the now ATM August 50 call. It also looks like the out-of-the-money May 47.50 put is seeing sell-to-open activity, as speculators believe CALM will trade atop $47.50 through week's end, when the front-month options expire.

As alluded to, CALM has exploded today. At last check, the shares are up 16.5% at $50.09, and fresh off a record high of $50.69. Longer term, the stock has advanced more than 28% in 2015.

If this uptrend holds up, it could force short sellers to the exits. More than 26% of Cal-Maine Foods Inc's (NASDAQ:CALM) float is dedicated to short interest, which would take 13 sessions to repurchase, at typical daily trading levels.

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