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Option Bulls Charge Kroger's Checkout Line

The bulls are shopping for a rally in Kroger.

The supermarket chain has consolidating at the top of its range recently and refusing to drop below its 200-day moving average. OptionMonster's tracking systems lit up late yesterday as investors purchased more than 3,900 January 24 calls against open interest of just 1,384 contracts.

Most of the trades priced for $0.45 and $0.50. These long calls lock in the price investors must pay to buy the shares, so they can really move if the stock pushes higher.

Kroger ended the session down $0.72 percent at $23.52. It has struggled for years with low margins and stiff competition, but its last earnings report on Dec. 1 was strong as same-store sales improved.

Overall option volume in the name was 8 times greater than average yesterday, with calls outnumbering puts by 62 to 1 in a reflection of the bullish sentiment.

Additional News: Kroger Profit Rises as Same-Store Sales Rise 5 Percent

Additional Views: Whole Foods 'Dead Money,' Buy Kroger, Safeway: Jeff Macke

—Russell has no positions in KR.

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David Russell is a reporter and writer for OptionMonster.

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