Stock Options Watch: HAIN, GNW, K

HAIN – Hain Celestial Group, Inc. – Bearish options are changing hands on theprovider of natural and organic food products today, with shares in Hain Celestial Group down 1.5% on the session to stand at $52.90 as of 12:40 p.m. ET. Downside put buyers on the operator of well-known brands, including Celestial Seasonings, Terra and Arrowhead Mills, among others, may be bracing for shares in the name to extend losses following the company’s fourth-quarter earnings report in February. The most active option contracts on Hain today are the Feb. $50 strike puts, with more than 5,000 lots in play versus open interests of 1,247 contracts. It looks like most of the $50 strike puts were purchased this morning for an average premium of $2.30 apiece. The trader or traders buying the puts may profit at expiration should HAIN shares drop 10% from the current price of $52.90 to breach the average breakeven price of $47.70. Shares in Hain Celestial Group last traded below $47.70 back in May of 2012. The company is scheduled to present at the 15th Annual ICR XChange in Miami Beach, Florida, on Thursday.

GNW – Genworth Financial, Inc. – Shares in Genworth Financial, Inc. reached their highest level since March 2012 this morning after the insurer announced plans to separate much of the company from its mortgage guaranty unit. The price of GNW shares jumped14% to an intraday high of $9.27 in the early going, sparking heavy trading traffic in upside call options on the name during the first half of the session. Traders positioning for Genworth’s shares to extend gains during the next two trading sessions snapped up January expiry call options. The $9.0 strike calls are seeing the most volume, with upwards of 6,400 in-the-money contracts in play versus open interest of 2,575 contracts. Time and sales data suggests most of the calls were purchased for an average premium of $0.14 apiece, thus positioning buyers to profit should GNW shares exceed the average breakeven price of $9.14 at expiration this week. Bullish positioning on Genworth Financial spread to the Feb. $8.0 and $9.0 strike calls, as well. It looks like traders purchased around 1,900 in-the-money calls at the $8.0 strike, and some 2,000 in-the-money calls at the $9.0 strike, at average premiums of $1.14 and $0.45 each, respectively. Genworth Financial, Inc. is scheduled to report fourth-quarter earnings after the closing bell on February 5th.

K – Kellogg Co. – Ready-to-eat cereal and convenience foods producer, Kellogg Co., appeared on our ‘hot by options volume’ market scanner on Wednesday morning after bullish options changed hands in the February expiry. Shares in Kellogg are trading slightly lower this morning, down 0.25% to stand at $56.98 as of 11:50 a.m. ET. The company is scheduled to report fourth-quarter earnings ahead of the opening bell on February 5th, and it looks like one trader may be positioning for shares in the name to rally in the weeks leading up to, and perhaps following, the earnings release. Call volume on Kellogg is greatest at the Feb. $57.5 strike where 1,000 contracts were purchased during the first three minutes of the trading day at a premium of $0.50 each. The long call position may be profitable at February expiration in the event that Kellogg’s shares rally 1.8% to surpass an effective breakeven price and fresh 52-week high of $58.00. Shares in the maker of Frosted Flakes, Eggo waffles and Froot Loops are up roughly 2.0% since the start of the year, and have increased nearly 23% during the past six months.

About Caitlin Duffy 373 Articles

Affiliation: Interactive Brokers

Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.

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