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Kellogg Put Options Active As Shares Hover Near Record Highs

Today’s tickers: K, TSN & FHN

K - Kellogg Company – Trading traffic in Kellogg Co. options this morning suggests some traders may be placing bearish bets on the stock ahead of the company’s second-quarter earnings report on August 1st. Shares in the maker of Pringles and Pop-Tarts are rose as much as 1.2% on Thursday morning to $66.76, just pennies off the stock’s all-time high of $66.84 reached back in April, amid strong gains in U.S. stocks. The most actively traded options contracts on Kellogg thus far in the session are the Aug $65 strike puts, with upwards of 1,400 lots in play versus open interest of 35 contracts. Time and sales data suggests most of the volume was purchased for an average premium of $0.93 apiece. Put buyers may profit at expiration next month should Kellogg’s shares decline 3.7% from the current price of $66.52 to breach the average breakeven point on the downside at $64.07.

TSN - Tyson Foods, Inc. – Shares in chicken, beef and pork processor, Tyson Foods, Inc., rallied 1.3% to a record high of $27.12 this morning. Options changing hands on the stock in the early going indicate at least one strategist is positioning for the price of the underlying to extend gains in the near term. Upwards of 3,000 Aug $28 strike calls appear to have been purchased during the first hour of the session for an average premium of $0.53 apiece. The bullish bet pays off if shares in Tyson surge 5.2% to exceed an average breakeven price and new all time high of $28.53 by August expiration. Tyson Foods reports third-quarter earnings in early August.

FHN - First Horizon National Corporation – Options volume is up sharply on First Horizon National Corp today, with total volume topping 2,500 contracts during morning trading versus the stock’s average daily volume of around 650 contracts. Shares in FHN are off 3.0% to stand at $11.74 as of 11:50 a.m. ET, but some options traders appear to be positioning for the price of the underlying to continue to decline ahead of July expiration next week. Volume is heaviest in the Jul $12 strike puts with more than 2,000 in-the-money contracts exchanged versus open interest of 61 contracts. It looks like most of the puts were purchased for an average premium of $0.39 apiece, thus preparing buyers of the contracts to profit in the event that FHN shares slip 1.1% from the current price of $11.74 to settle below the breakeven point at $11.61 at expiration. First Horizon National Corp reports second-quarter earnings next Friday.

 

Caitlin Duffy
Equity Options Analyst


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