Smithfield Foods gapped higher at the open today, and traders are positioning for it to keep running into next year.
OptionMonster's tracking programsdetected unusual activity in the April 17.50 calls, which traded more than 6,700 times against open interest of 1,054 contracts. Almost all the volume priced for $0.70.
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Smithfield rose to 4.29 to $14.35 in afternoon trading. The meat processor has been struggling to break through the $14.40 level since early July, while making successively higher lows. Some chart watchers may interpret that as a sign of a bullish trend and expect the shares to move significantly when they break resistance.
Smithfield's results slightly missed analysts' estimates that last time it published earnings on Sept. 8, but management reported progress restructuring its packaged-meat business. The company also sold 21.7 million shares for $13.95 in a secondary offering on Sept. 17. Its next earnings release is scheduled for Dec. 10.
Overall options volume in Smithfield is four times greater than average today, with calls accounting for more than 80 percent of the activity.
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David Russell is a reporter and writer for OptionMonster.