KKD ? Krispy Kreme Doughnuts, Inc. ? It?s a sweet day for investors in Krispy Kreme Doughnuts, Inc., with shares in the name soaring 22.5% on the back of better-than-expected third-quarter earnings to the highest level in more than a year.
Shares in the doughnut maker are off earlier highs, but continue to trade up approximately 20% on the session at $9.04 as of 11:50 a.m. ET. Buyers of bullish options on Krispy Kreme yesterday prior to the earnings report are enjoying sizable overnight gains in the value of their positions.
December expiry call buyers snapped up around 400 of the $7.0 strike calls at an average premium of $0.74 apiece on Monday and purchased roughly 200 of the $8.0 strike calls for an average premium of $0.20 each. Buyers of the $7.0 strike calls now find premium on the contracts has almost tripled to $2.15 each, while premium on the $8.0 strike calls is up six-fold overnight to $1.20 apiece just before midday in New York.
One trader looking for KKD shares to extend gains during the next couple of months purchased 185 far-out-of-the-money calls at the Jan. $11 strike for a premium of $0.05 per contract. The trader may profit at expiration next year if shares in Krispy Kreme rally another 22% during the next couple of months to top the effective breakeven price of $11.05.
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ABX ? Barrick Gold Corp. ? Shares in gold mining company, Barrick Gold Corp., reversed earlier losses on Tuesday to trade up 0.70% on the day at $34.53 by 12:05 p.m. ET. Barrick?s shares have declined 25% since the start of 2012, but one or more options players trading April expiry calls today may be looking for a rebound during the next five months.
Roughly 9,000 call options changed hands at the April 2013 $35 strike against open interest of 868 contracts this morning, with the bulk of the volume purchased for an average premium of $2.32 per contract.
The trader or traders purchasing upside calls on ABX stand ready to profit in the event that shares in the world?s largest metal producer jump 8% to exceed $37.32 at April expiration. Shares in Barrick Gold Corp. traded above $37.32 as recently as November 1st.
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