Strangle Sold on Dean Foods (DF)
Shares of Dean Foods Co. (DF) are trading higher on the session after the company released preliminary Q3 results for its WhiteWave-Alpro segment that exceeded the Street’s estimates.
In August, Dean had revealed it would spin off WhiteWave, its fast-growing unit that sells Horizon Organic dairy products and Silk soymilk. The IPO is expected to price in the range of $14-16 on 20 million shares.
Shares of DF are up by 12.23% today, trading at $16.88.
One options trader is taking the opportunity to sell premium here. A short while ago, the December $11/14 strangle was sold 7,500 times, on the bid, for $3.20. Given the respective on open interest on each strike, 235 and 812, this is clearly fresh positioning. The trade has pushed overall options volume to 8.5x normal volume.
UPDATE: As this report was being written, 5k more Dec12 $11/14 strangles were sold, on the bid, for $3.25.
The whole short strangle was paired with 1,250,000 shares of DF common, that traded between $16.70-16.85.
30-day implied volatility remains muted today, at 54%. 10-day realized vol is registering 23.32%.
Dean Foods Company is a food and beverage company. It operates through two segments: Fresh Dairy Direct-Morningstar and WhiteWave-Alpro.
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