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Why Are Traders Bullish Ahead of Chiquita Earnings?

Traders are bullish on Chiquita Brands ahead of the company's earnings report today after the market closes.

The average daily option volume in the name is 1,500 contracts, but one trader was willing to step up for 10,000 calls yesterday at the March 20 strike, according to OptionMonster's tracking systems. One block of 1,760 calls was bought for $0.20, and seconds later 7,040 were purchased for $0.25. This action was against open interest of 1,856 contracts, so it represented new opening contracts.

Chiquita closed yesterday at $15.28, up 1 percent on the day. The food distributor is still trying to recover after pulling back from its 52-week high of $19.59 set in mid-December and finding support at $14.

The trader must have a strong bullish conviction because the stock would need to rise more than 32 percent for the calls purchased yesterday to make a profit, with March expiration less than a month away.

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Chiquita Brands Competes With:

Dole Food Company

Fresh Del Monte Produce

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Chris McKhann is an analyst and writer for OptionMonster.

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