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Bulls Breathe Life Into Sealed Air

David Russell|Writer, OptionMonster
Friday, 13 Jan 2012 | 5:58 AM ET

Sealed Air has been trading sideways since the summer crash, but yesterday its options came to life.

OptionMonster's real-time tracking systems detected the purchase of about 2,500 February 20 calls for $0.10 to $0.20. The previous open interest at the strike was just two contracts, so these trades obviously represent new positions.

The long calls lock in the purchase price that investors must pay to buy shares of the company, which is best known for its Bubble Wrap packaging material. The option premiums could double or triple if Sealed Air rises 10 percent to 15 percent, but the contracts would expire worthless if the stock fails to move.

Sealed Air shares rose 2.16 percent to $17.99 yesterday. The stock lost about a quarter of its value between May and August, but has been consolidating since then. This week it managed to find support above its 100-day moving average, which some investors may consider a bullish sign.

The company's next earnings report is scheduled for the morning of Feb. 9. Its total option volume was 14 times greater than average yesterday, with calls outnumbering puts by 34 to 1.

—Russell has no positions in SEE.

Additional News: Sealed Air to Cut Jobs, Consolidate Facilities

Additional Views: Jefferies Cuts Sealed Air Price Target

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David Russell is a reporter and writer for OptionMonster.

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