Traders Bid Up Chiquita Options

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

By Chris McKhann, an analyst at OptionMonster.

NEW YORK ( TheStreet) -- Traders are going bananas for Chiquita Brands ( CQB) ahead of earnings.

Chiquita Brands is up 2%, trading at $11.94, the highest level since Feb. 19, the day before its earnings report at the time. The price closed at $12.73 that day and $7.27 the next. The stock eventually got down to $4.32 before turning and rallying. It's almost tripled from there.

One options trader is clearly looking for further gains. OptionMonster's systems show 5,000 of the Nov. 15 calls purchased, with the largest block of 4,500 snapped up for $0.85. This volume is especially notable given that the 20-day average options turnover is just 176 contracts.

Clearly, this trade is based on the idea that the response to earnings on Aug. 6 will be as significant in a bullish direction.

The writer has no holdings in the securities mentioned.

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