Quick Trades Pay Off in Mondelez

By David Russell of OptionMonster
 
NEW YORK -- Mondelez (MDLZ) has been powering higher, and Thursday the fast money piled into the snack-food company.
 
Barely half an hour after the opening bell Thursday, OptionMonster's trade scanners detected heavy buying in the Weekly 36 calls that expire next Friday, Jan. 24. The largest block of 20,000 contracts priced for 27 cents.
 
These calls lock in the price where shares can be purchased, letting investors cheaply control a move to the upside. Given the short time until expiration, Thursday's traders were clearly looking for a quick move.
 
And they got it: The stock pushed higher, and those calls would trade for as much as 93 cents by early afternoon, a profit of 244% in less than three hours. More than 44,000 of the contracts eventually changed hands with no previous open interest, so they are all new positions.
 
Mondelez shares ended the session unchanged at $35.70. The company, part of the old Kraft conglomerate, reports earnings on Feb. 12. Its brands include Chips Ahoy, Cadbury, and Cheese Nips.
 
Overall option volume was 14 times greater than average in the session, with calls accounting for a bullish 92% of the total.
 
Russell has no positions in MDLZ.

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.

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