Bulls Dive Into Campbell Soup

By Mike Yamamoto of OptionMonster
NEW YORK -- Campbell Soup (CPB) has been rebounding sharply, and option traders cleaned up in a hurry on Friday.
OptionMonster's tracking systems showed quick buying in the December 43 calls, with large blocks hitting for 15 cents to 35 cents early in the afternoon. The shares started climbing almost immediately, and those options shot as high as 95 cents.
These calls lock in the price where a stock can be purchased no matter how far it might climb, giving investors a relatively inexpensive way to position for a rally. They can also tremendous significant leverage to the share price, which is exactly what we saw on Friday.
Campbell's shares were up about 3% when the calls started moving but ended the session higher by 5.34% to $42.24. The food company plunged from the $42 area on Nov. 19 because of weak quarterly results and guidance, but it has now filled that gap.
Almost 20,000 of those December 43 calls would eventually change hands in volume far above the strike's previous open interest of just 1,019 contracts. Overall option volume was 17 times its daily average for the last month, with total calls accounting for a bullish 9-to-1 ratio.
Yamamoto has no positions in CPB.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

If you liked this article you might like

Walmart Will Start Offering Meal Kits on Its Website by December

Albertsons-Plated Deal Likely 'First Domino to Fall' In Meal Kit M&A

Meal Kits Are Hot, and Weight Watchers May Be Next to Try Them

Watch Out For the Dominoes That Fall: Cramer's 'Mad Money' Recap (Wed 9/20/17)

Cramer: Dominoes Are in Play Today