By David Russell of OptionMonster
NEW YORK -- Traders cleaned up in a hurry Tuesday with upside bets in food distributor Sysco (SYY).
OptionMonster's monitoring systems detected the paper early as money flowed into the December 34 calls for 35 cents to 40 cents. The stock had been consolidating since gapping higher on a strong earnings report earlier in the month, and Tuesday's buyers are looking for a continuation of that move. They didn't have to wait long.
Sysco shares paused for two hours, but then continued higher and ended the session up 1.12% to $34.16. Those calls, meanwhile, more than doubled to as much as 85 cents.
The call buying worked because it allowed traders to lock in the price where they could purchase the stock no matter how far it climbs. Given that these contracts are inexpensive relative to the stock itself, even a small move in shares can result in tremendous leverage.
Overall option volume was 27 times greater than average, with calls accounting for a bullish 92% of the total.
Russell has no positions in SYY.