Options volume jumped last month and the cost of bullish contracts is the highest since 2007 relative to bearish ones, according to data compiled by Bloomberg. Among the 10 options with the highest ownership, seven were bullish. The shares have climbed 18 percent since the start of February as traders bet the maker of Corn Flakes and Pop Tarts would be acquired.
…Traders own more Kellogg bullish options than bearish ones. The number of outstanding calls more than doubled since the end of March to 64,450 contracts on May 9. That compared with a 62 percent increase to 40,494 for puts, data compiled by Bloomberg show.
“The reason there would be interest for Buffett is that it’s a basic business,” Yarbrough, an analyst covering consumer stocks for Edward Jones, told Bloomberg News. “It’s a very consistent business. It’s decent in bad times, it’s decent in good times. It generates a lot of cash flow, and they like that.”
Kellogg, for its part, is no commenting on the rumors.
K stock is up 3.5% in the past few days – and up 11% year to date.