In honor of National Chocolate Day, The Hershey Company (HSY) released what must be considered a sweet earnings report for investors. As I write this the stock is at 100.50 up 4.99 or just over 5% on the day. I decided in honor of the 'holiday' and HSY’s great results that I would go looking for a trade that correctly anticipated today’s rise in shares.
Early Thursday, with HSY trading around 96.75 there was a buyer of the HSY Oct 28th 99.50 Calls in several lots at prices between 0.37 and 0.38. That’s an option trade that expires today on the close. The payoff diagram shows how the trade works based on how HSY finishes the day.
Note I placed a little dot on the chart, that’s where HSY is trading as I write this, not where it finished the day. So far the day looks good for this short term out of the money call buyer. Maybe next week they can afford to hand out large Hershey bars to trick or treaters.