NTRI – NutriSystem, Inc. – Traders hoping to expand their wallets in the New Year are turning their attention to weight management services provider, NutriSystem, Inc., as shares in the name move up sharply, adding to recent gains. NTRI and its competitors are seen as beneficiaries of the perennial flood of “Resolutioners” that crowd into gyms, fitness centers and nutritionists offices touting various goals for the New Year. Shares in NutriSystem are currently up better than 7.5% on the day, and nearly 15% for the week, to stand at $8.97 as of 11:40 a.m. ET in New York trading on Friday. One or more options traders positioning for shares in NutriSystem to extend gains during the first few months of the New Year snapped up calls in the February and March expiries this morning. Roughly 1,100 call options changed hands at the Feb. $9.0 strike during the first half of the session, with most of the volume purchased for an average premium of $0.20 apiece. Traders long the calls stand ready to profit at expiration should shares in NTRI rally another 2.6% over the current price of $8.97 to top the average breakeven point at $9.20. Bullish activity spread to the Mar. $10 strike, where around 450 calls appear to have been purchased for an average premium of $0.15 each. Call buyers may profit at March expiration in the event that NTRI shares increase at least 13% over the current level to exceed $10.15 during the next 11 weeks. Shares in the provider of ready-to-eat meals last traded above $10.15 back in October of last year. Even after including this week’s gains in the price of the underlying, shares in NutriSystem are still down more than 40% since this time last year.
APKT – Acme Packet, Inc. – Double-digit percentage gains in shares of Acme Packet on the back of an upgrade to ‘Buy’ from ‘Hold’ at Stifel Nicolaus with a 12-month target share price of $27.00 on Friday has landed some options traders with hefty overnight paper profits on bullish positions initiated yesterday. Shares in APKT are up 11.8% at $23.90 in early afternoon trading, and have increased 110% since the end of July 2012. Traders positioning for shares in Acme Packet to rally this week purchased around 1,000 calls at the Jan. 04 ’13 $22 strike yesterday for an average premium of $0.35 apiece. Premium required to buy deep in-the-money weekly calls at the $22 strike today increased six-fold overnight, with the bid/ask spread at $2.05/$2.15 as of 12:40 p.m. ET. Open interest in weekly options that expire after today is greatest at the Jan. 04 ‘13 $22.5 strike, totaling more than 2,900 open contracts. A review of time and sales data indicates most of the $22.5 strike weekly calls were purchased in a block of 2,290 contracts at a premium of $0.75 apiece. The value of the contracts to the buyer has more than doubled since purchase, with premium on the in-the-money calls currently at $1.80.
KKD – Krispy Kreme Doughnuts, Inc. – Doughnut maker and retailer, Krispy Kreme, popped up on our scanners this morning on heavier than usual options volume. Shares in the name increased more than 10.5% during the first half of the trading session to $11.18, the highest level in more than five years. Traders positioning for shares in Krispy Kreme to extend gains during the next couple of weeks purchased in- and out-of-the-money call options in the early going on Friday. Bulls appear to have purchased upwards of 510 calls at the Jan. $11 strike for an average premium of $0.23 apiece. Call buyers make money at January expiration as long as shares in KKD settle above a fresh multi-year high of $11.23. The Jan. $12 strike calls also attracted volume this morning, with around 150 calls changing hands at that strike for a premium of $0.05 apiece. Overall options volume on the name is greater than 5,800 contracts as of 12:20 p.m. ET, versus the stock’s average daily options volume of around 319 options contracts.