Kraft Foods (KFT, news, chart, volatility) shares are up 61 cents to $33.26 and sentiment is bullish following news that the company will replace American International Group (AIG) in the Dow Jones Industrial Average. The selection of Kraft is somewhat of a surprise (i.e. are you kidding me?) because 1) it is not even in the top 50 US companies based on market value and 2) it seems that Dow Jones might pick another financial such as Wells Fargo (WFC) or Goldman Sachs (GS). Or, Apple Computer (AAPL) and Cisco (CSCO), which are now the ninth and tenth largest US company by market value, might seem like a better choice for the “industrial average”. Instead, they committee picked KFT and, while shares trade higher, 2,600 calls have traded on the stock, or roughly 10 times the number of puts.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.