OptionMonster's Heat Seeker tracking program detected the purchase of about 6,400 February 110 calls Thursday, most of which priced for $1.20. Volume was 19 times open interest at the strike, which indicates that new money was put to work.
Long calls cheaply lock in the price where traders can buy a stock. Their low cost helps manage risk, as only the cost of the options can be lost if shares drop.
Hershey rose 2.03% to $107.17 on Thursday and has been accelerating higher since the summer. Investors shrugged off a weak earnings report during that time, putting the candy maker within striking distance of its all-time highs in February.
Total option volume in Hershey was 18 times greater than average in the session, with calls outnumbering puts by more than 12 to 1.
-- Written by David Russell of OptionMonster
Russell has no positions in HSY