Paper sold 1,000 PF June 40 puts & 1,000 PF June 50 calls. Based on the move in IV this customer was selling premium.?
Pinnacle Foods Inc., trading 44.89 with an IV30 of 29.43 and HV10 of 32.20, saw a strangle trade today.? The stock, with an ADV of 352 and OI of 9200 contracts, saw a customer sell 1000 of the June 40 puts at .52 and 1000 of the June 50 calls at .67, based on the move in IV this customer was selling premium.? The trade was an opening execution.
This is a customer that is betting that the underlying is unlikely to move below 40 or above 50 and was willing to collect 1.29 to put this play on.? The trade has a break-even below 38.70 and 51.30, which would be a nice move for Pinnacle Foods.
This trade should be considered bearish volatility in PF and and neutral the underlying.