Traders ate up Mondelez International calls Monday morning. Do they see a takeover around the corner?
Mondelez shares have slid nearly 6 percent from a June high because of the company's heavy exposure to emerging markets, which account for 80 percent of its revenue. Emerging markets have looked especially weak lately.
Monday's options activity, however, suggests that traders are positioning for a bounce. On Monday morning, 5,000 July 29 strike calls and 3,000 July 5 weekly calls were purchased for $0.75 and $0.40, respectively. The weekly options put the trader at risk for $120,000 as of Friday, and the overall commitment to this trade cost about $500,000 a million dollars.
With a 2 percent bump today, the stock is priced above $29. For the weekly calls to break even, Mondalez would need to rise just another 10th of a percent. On the other hand, for the July monthly calls to make this trader money, the stock would need to add roughly 1.5 percent.