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Traders sense Sysco turnaround

Options Action: Turnaround for Sysco?

Sysco shares have fallen more than 6 percent since Monday after the nation's largest food distributor said it would terminate its merger agreement with US Foods. The news prompted a slew of downgrades, with Deutsche Bank and Guggenheim Securities lowering their ratings on the stock to "hold." But despite the sharp selloff, it appears some traders are sensing a turnaround.

On Tuesday, when the shares were down nearly 4 percent and options call volume ran more than 20 times its daily average, one trader bet more than $2 million that the stock would soar in the next five months.

Specifically, the trader purchased 25,000 of the November 39-strike calls for 85 cents each. Since buying a call allows one the right to purchase a stock at a set price at a given time, this trade is profitable if shares of Sysco are above $39.85, or more than 10 percent higher by November expiration.

Read More US judge, FTC stays Sysco merger with US Foods

"Call volume has been above average [all week]," options expert and CNBC contributor Mike Khouw said Tuesday on CNBC's "Fast Money." Khouw noted that the November 40-strike calls were the second most actively traded options on the day. "So it would appear that options traders are maybe not agreeing with the equity traders here."

Shares of Sysco are down 9 percent year to date, but according to Khouw they are attractive from a valuation perspective in the long term. "The stock is going to be trading about 16 times full-year 2016 EPS," said Khouw. "This might be a cheap way to make a bullish bet that the stock would bounce back."

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