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Campbell Soup Co. Put Options Heat Up As Shares Cool

 

Today’s tickers: CPB, GFI & DD

CPB - Campbell Soup Co. – Put options on the food products company are active this morning after Campbell Soup Co. said full-year sales growth for 2012 will likely be at the lower end of its prior forecast. Shares in the maker of soup, sauces and beverages are down 1.4% on the day at $32.38 as of 12:10 p.m. in New York. Put buying in the September expiry suggests some options market participants may be preparing for shares in CPB to extend losses after the company reports fourth-quarter earnings on September 4th. Most of the contracts in play appear to have been purchased by one strategist given the identical timing of transactions in the Sept. $31 and $32 strikes. Lighter volume in the Sept. $32 strike put indicates around 180 contracts were purchased for an average premium of $0.39 each, while more than 900 puts were purchased at the Sept. $31 strike for a premium of $0.39 each. The $31 puts may be profitable in the event shares in CPB drop 5.5% to breach the average breakeven price of $30.61 at expiration.

GFI - Gold Fields Ltd. – Heavy call buying in Gold Fields Ltd. indicates one or more traders are positioning for shares in the gold mining company to rise during the next few months. Shares in the gold producer are currently up 0.65% on the day at $12.13 as of 12:30 p.m. on the East Coast. Trading traffic in Gold Fields options is heaviest in the Oct. $12 strike call, which has changed hands more than 18,000 times so far today versus open interest of 858 contracts. It looks like most of the calls were purchased for an average premium of $0.85 apiece by strategists eyeing a 6%-plus move to the upside above the breakeven price of $12.85 by October expiration. The company is scheduled to report second-quarter earnings ahead of the opening bell on August 23rd.

DD - E.I. du Pont de Nemours & Co. – Shares in the commodity chemicals producer are down 1.85% at $47.81 this afternoon after the company said earnings for 2012 are likely to come in at the low end of their previously forecasted range. DuPont reported better-than-expected second-quarter earnings ahead of the opening bell this morning. Options traders betting the stock rebounds in the next couple months opened long call positions this morning. It looks like traders snapped up 1,500 calls at the Sept. $50 strike for an average premium of $0.74 apiece. Profits are available on the upside calls should shares in DD rally more than 6% to top the breakeven price of $50.74 at September expiration.

 

Caitlin Duffy

Equity Options Analyst


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