HNZ – H.J. Heinz Company – Shares of the world’s biggest ketchup maker are lower by 0.80% to $45.88 in late afternoon trading after the firm revealed plans to purchase Chinese soy-sauce manufacturer, Foodstar. News of the proposed acquisition perhaps emboldened bullish options investors observed utilizing call options to position for significant appreciation in the price of the underlying stock by September expiration. Optimistic options players purchased approximately 3,100 calls at the September $50 strike for an average premium of $0.30 per contract. Investors long the calls are prepared to profit should the ketchup manufacturer’s shares surge 9.6% to surpass the average breakeven price of $50.30 by expiration day in September. Increased demand for options on HNZ and news of the Foodstar acquisition lifted the stock’s overall reading of options implied volatility 10.3% to 16.90% by 3:30 pm (ET).
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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