Mike Khouw Sees Unusual Options Activity In Kellogg Company
On CNBC's Options Action, Mike Khouw analyzed options trading activity in Kellogg Company (NYSE: K). The stock traded 5.26 percent higher on Thursday and its call options daily volume was four times higher than the average daily call options volume.
Early in the trading session, Khouw noticed a purchase of 2,800 contracts of the July 80 calls for $1.85. As the stock traded higher, options traders started to buy the July 85 calls for $1.65. Around 3,500 contracts of the August 85 calls were traded on Thursday and that was a bet that the stock could be trading another $5 higher at the August expiration, explained Khouw.
Traders who own Kellogg should consider selling call options against the stock, because implied volatility is high, thinks Khouw.
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