Kraft Speculative Options Trades Going Farther Up On Strikes (KFT)

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By Douglas A. McIntyre Published
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This morning we gave another heads-up volume spike alert on Kraft Foods Inc. (NYSE: KFT) as traders have been buying up call options after some non-directional high volume trades pulled more speculators into the fray.  What is interesting is that this high volume is entirely in August 2008 expiration options which have less than ten days until expiration.  To prove a point, the AUG08 $35.00 CALLS have a higher open interest than all other contracts combined in the options from September 2008 out to March 2009.

AUG08     Volume    OpInt.
$35.00         1,785    579,365
$37.50        61,389   208,434
$40.00       257,962   273,812

This started out on what appeared to an arbitrage trade, but has evolved into a trade with more speculation than mathematics.

Jon C. Ogg
August 6, 2008

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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