Zale Corp. Calls And Puts Active As Shares Extend Gains

  Today’s tickers: ZLC, KFT & VRX ZLC  - Zale Corp. –  Shares in jewelry retailer, Zale Corp., rallied as much as 6.7% this morning to hit a fresh 52-week and intraday high of $5.89. The stock rose sharply last week as well after the company reported its seventh consecutive quarterly increase in sales and a narrower-than-expected fourth-quarter loss. The stock has nearly doubled in value since the beginning of August, and is up 185% since trading down to a 52-week low of $2.06 back in October. Options traders appear to be selling put options in the front month and picking up October expiration calls. It looks like 320 puts were sold for a premium of $0.10 each at the Sep. $5.0 strike today versus open interest of 544 contracts. Around 400 of the existing positions in the $5.0 strike put appear to have been purchased on Friday for a premium of $0.17 apiece. Put sellers may be ditching recently purchased downside protection on the name as the shares continue to climb, or could be selling the contracts outright in the expectation that the puts expire worthless later this month. Meanwhile, the purchase of around 170 of the Oct. $5.0 strike calls for an average premium of $0.84 per contract today indicates one or more strategists are positioning for shares to continue higher during the next seven weeks. Call buyers stand ready to profit at expiration next month should Zale Corp.’s shares rally 5% over the current price to exceed the breakeven point at $5.84. The stock is currently off its highs of the session, trading up 0.72% at $5.56 as of 12:45 p.m. in New York. KFT  - Kraft Foods, Inc. –  The food products company popped up on our ‘most active by options volume’ market scanner this morning after a burst of trading activity in the September expiry calls. The trader or traders responsible for the bulk of the roughly 18,000 contracts in play…

 

Today’s tickers: ZLC, KFT & VRX

ZLC - Zale Corp. – Shares in jewelry retailer, Zale Corp., rallied as much as 6.7% this morning to hit a fresh 52-week and intraday high of $5.89. The stock rose sharply last week as well after the company reported its seventh consecutive quarterly increase in sales and a narrower-than-expected fourth-quarter loss. The stock has nearly doubled in value since the beginning of August, and is up 185% since trading down to a 52-week low of $2.06 back in October. Options traders appear to be selling put options in the front month and picking up October expiration calls. It looks like 320 puts were sold for a premium of $0.10 each at the Sep. $5.0 strike today versus open interest of 544 contracts. Around 400 of the existing positions in the $5.0 strike put appear to have been purchased on Friday for a premium of $0.17 apiece. Put sellers may be ditching recently purchased downside protection on the name as the shares continue to climb, or could be selling the contracts outright in the expectation that the puts expire worthless later this month. Meanwhile, the purchase of around 170 of the Oct. $5.0 strike calls for an average premium of $0.84 per contract today indicates one or more strategists are positioning for shares to continue higher during the next seven weeks. Call buyers stand ready to profit at expiration next month should Zale Corp.’s shares rally 5% over the current price to exceed the breakeven point at $5.84. The stock is currently off its highs of the session, trading up 0.72% at $5.56 as of 12:45 p.m. in New York.

KFT - Kraft Foods, Inc. – The food products company popped up on our ‘most active by options volume’ market scanner this morning after a burst of trading activity in the September expiry calls. The trader or traders responsible for the bulk of the roughly 18,000 contracts in play…
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