WhiteWave Foods Co (WWAV) Options Traders Hungry For More Upside

WhiteWave Foods Co (WWAV) stock has caught fire today, as have its options pits

Jun 30, 2016 at 2:02 PM
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WhiteWave Foods Co (NYSE:WWAV) stock and call options are in demand. Shares of the Silk maker have shot 3.1% higher to trade at $46.58, while calls are crossing at five times the usual intraday rate. In fact, intraday call volume comes in at 9,500 contracts -- hitting the 99th annual percentile, and dwarfing the roughly 700 puts on the tape.

Digging deeper, WWAV's August 47.50 call is the most active strike by a mile. According to Trade-Alert, traders are buying to open fresh positions, counting on extended upside through back-month expiration -- at the close on Friday, Aug. 19. Earlier, at its intraday high, WWAV came within a nickel of that out-of-the-money strike, but it hasn't settled a week north of $47.50 since last August.

Historically speaking, options traders have been extremely call-skewed toward the food stock. Over the past 50 sessions, speculators have bought to open 13.46 calls for each put at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- a ratio surpassed just 1% of the time in the prior year. Underscoring the prevailing call bias, WWAV's Schaeffer's put/call open interest ratio (SOIR) of 0.13 ranks below all but 1% of readings taken in the last 12 months.

Optimism is brimming within the analyst community, too. Ninety percent of brokerage firms consider WWAV a "buy" or better, with not a single "sell" opinion to be found. On top of that, the stock's consensus 12-month price target of $50.21 is just a chip-shot from record-high levels. In fact, Jefferies earlier in the week named WhiteWave one of its top four packaged-food stocks -- likely a reason for the stock's push higher of late.  

Technically speaking, WhiteWave Foods Co (NYSE:WWAV) has been a beast in 2016, gaining nearly 21%. Over the past three months alone, the stock has outperformed the broader S&P 500 Index (SPX) by more than 14 percentage points, helped by a recent bounce off its 50-day moving average.

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