Those long calls lock in an entry price for shares and are heavily leveraged to upside in the stock. They could easily double or triple from even a modest rally following the release of quarterly results after the bell tomorrow.
Krispy Kreme ended yesterday's session at $6.81, up 7.75 percent. The doughnut and coffee company has been trending higher since early 2009, fluctuating violently but making consistently higher lows along the way. It's been paying down debt and raising prices, which has helped produce strong financials for the last two quarterly reports.
Overall option volume was 11 times greater than average in yesterday's session, with calls outnumbering puts by 165 to 1.
— Russell has no positions in KKD.
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