Bulls Dig Hogs

Smithfield Foods (NYSE: SFD), producer of pork products, is attracting some bullish all activity today. The July $17.50 strike calls were just purchased 7,000 times for $0.85, very close to the offer. The stock is currently up by 1.34% today on no news.

Smithfield has been selling off as of late, and looks to be filling in a multi-day gap that was formed in November of last year. The bottom of the gap resides around $14; I would wait or the stock to drift to that point before initiating a bullish trade in the name. When it gets to that level I would consider the April $17.50/12.50 risk reversal, where you should be able to sell the $12.50 put and buy the $17.50 call for even or a net credit.