Bullish Player Goes for Second Helping of Kraft Call Options

Today’s tickers: KFT, GG, AEO & STEC KFT  - Kraft Foods, Inc. –  Retail-therapy may be less attractive today following disappointing reports from industry giants such as The Gap, Inc., but options traders are still managing to enhance bullish spirits by turning to food instead. Kraft Foods popped up on our scanners today due to heavy trading traffic in June contract call options. It looks like one player is extending optimism on the stock, having purchased call options on Kraft five weeks prior, on April 15. Shares in Kraft Foods increased as much as 1.3% this afternoon to touch an intraday and new 52-week high of $35.44. It appears the investor purchased June $34 strike calls five weeks ago for an average premium of $0.40 per contract when shares in the name were hovering around $33.29. Kraft’s shares rallied 6.45% in the past five weeks to touch today’s new 52-week high, but the value of the June $34 strike calls has increased more than three-fold during the same time period. Some 7,000 call options at the June $34 strike were sold today for an average premium of $1.46 each. If we assume the call seller and buyer are one and the same, net profits on the position amount to $1.06 per contract. Next, it looks like a fresh batch of roughly 7,000 call options were purchased up at the higher June $36 strike for an average premium of $0.25 per contract. Profits on the fresh bullish stance kick in at expiration next month as long as Kraft’s shares rally another 2.3% to exceed $36.25 within the next six weeks. Other bullish players purchased some 1,400 in-the-money calls at the June $33 strike for an average premium of $2.44 each. Another strategist appears to be ditching a bearish position on Kraft Foods by unraveling a ratio put spread in the September contract. Options implied volatility on Kraft trimmed 3.5% to stand at 31.33% this afternoon.…