Unusual volume in Diamond Foods (DMND) today. The stock saw a morning spike and was recently up $1.97 to $34.62 on volume of 2.5 million shares, which is more than double the normal volume for midday action. Options activity in the San Francisco, CA snacks products company is picking up as well, with 10,000 calls and 2,230 puts traded in the name. The top trade is a 500-lot of Mar 50 calls on the $1.65 bid, which is possibly a liquidating trade. 2,220 now tarded against 1,223 in open interest. However, it appears that buyers are opening positions in Feb 45 and Mar 42 calls, with 1580 and 1084 contracts traded, respectively, and about 80 percent of the flow trading at the offer. Meanwhile, implied volatility in the options on the stock is up 7.5 percent and elevated at 114. Bullish flow in DMND might be a play on earnings, due out early-to-mid February.
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.