Today’s tickers: DMND, MHS & TRIP
DMND - Diamond Foods, Inc. – Investors sent shares in the maker of Pop Secret and Emerald snack nuts sharply lower on Thursday after the Company said it will replace its top two executives and restate earnings for the past two years. The already hard-hit stock opened down more than 40.0% this morning to touch an intraday- and multi-year low of $21.44. Options on Diamond Foods attracted all kinds today, with some strategists nibbling at calls and selling puts, while others position for further downside in the name. Investors expecting shares to somewhat recover in the next six trading sessions picked up call options in the front month. Approximately 1,400 calls were purchased at the Feb. $25 strike for an average premium of $0.86 each. Call buyers may profit at expiration next Friday in the event that DMND’s shares rally 11.2% off the current price of $23.25 to top the average breakeven price of $25.86. Meanwhile, out-of-the-money put selling in the front month may mean some traders expect the stock is unlikely to tumble much further from here within the next week. Put sellers looked to the Feb. $20 strike, selling around 1,500 of the contracts to receive an average premium of $0.64 per contract. Traders keep the full amount of premium as long as shares in Diamond Foods exceed $20.00 through expiration. Options volume on the food products company today currently exceeds 95,000 contracts, an active day for the stock, which has 158,981 contracts comprising overall open interest.
MHS - Medco Health Solutions, Inc. – Shares in the pharmacy-benefits-manager (PBM) are off slightly this morning, down 0.20% at $60.70 as of 11:30 a.m. in New York, but options activity in the name suggests the stock…
