Option Bulls Hold Out Hope For Whole Foods Market, Inc. (WFM)

Whole Foods Market, Inc. (WFM) is spiraling yet again -- this time, after a bearish note from Northcoast

Jun 15, 2016 at 12:57 PM
facebook X logo linkedin

Whole Foods Market, Inc. (NASDAQ:WFM) stock is reeling yet again, just a day after getting roughed up by the U.S. Food and Drug Administration (FDA). Making matters worse, Northcoast lowered its rating on the shares to a "sell." Meanwhile, stock volume is taking off -- in the 98th annual percentile -- while WFM options are trading at three times the normal intraday rate.

Right now, the most active WFM option is the weekly 6/24 32-strike call. All indications hint at buy-to-open activity, suggesting traders think the grocery stock will rebound above $32 by next Friday's close, when the weekly series expires. However, WFM's bleeding shows no signs of stopping, with the shares down 4.2% at $31.17. In fact, since its most recent peak at $35.58 one week ago, the stock has given back over 12%.

One group potentially profiting from this sharp move lower is short sellers. Nearly 13% of WFM's float is sold short, and at the stock's typical trading levels, it would take nine sessions to cover these bets. And, like Northcoast, analysts have struck a bearish chord with respect to the shares. Sixteen of 18 brokerages currently consider WFM a "hold" or worse.

On the other hand, put sellers may be on pins and needles. Across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Whole Foods Market, Inc. (NASDAQ:WFM) has seen nearly 10,900 puts sold to open over the past 10 sessions, versus just 5,000 bought to open. With the stock in free-fall mode, the option writers could be exposed to steep losses if their strikes get breached.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI