Unusual Call Option Trades: Potbelly Corp (PBPB), Office Depot Inc (ODP)

We’ve always told you how much we love UNUSUAL and/or large call buys in small. little known companies.  Well, this morning we already have one big one in Potbelly Corp (PBPB).  There was also an interesting one in Office Depot Inc (ODP).

Potbelly Corp (PBPB) is not a well known or covered company yet here this morning we saw a large call buy.  A trader bought 2,879 October $14 calls just after the open today, mostly at the ask of 20 cents.  That makes for a transaction value of just $58,000, but it is a very unusual trade.  Call volume has surged since to over 3500 contracts traded as the copycats (like us) jump in on this.  All these trades were opening as the open interest was just 129 before today. Right now those same calls are bidding 35 cents, and ask is now 40 cents, so you’ll have chase this options play in PBPB if you’re so inclined.  Last trade was 38 cents. We’re didn’t hesitate on this one at 30 cents.

potbelly PBPB logoPotbelly Corp (PBPB) is currently trading at $12.45up just 26 cents today.  PBPB has a 52 week high of $33.90, and a low of $10.91 on the year. So clearly this trader thinks PBPB has turned the corner and is ready to break out from it’s lows. The company doesn’t announce earnings until Nov 10th so this is clearly a play on either an impending upgrade from a major analyst or some other unexpected corporate announcement.  Our money is on the former.

Given the action in Staples the past few days, it is very interesting that Office Depot Inc (ODP) is getting some unusual option trades. A trader bought 5,000 +  October $6.00 calls in ODP just after the markets opened.  That trader paid $0.20, and if you act fast you’ll only have to pay a little more now. ast the calls are now asking 25 cents last trade at 20 cents. This is could be based on some sort of speculation that ODP may rise as Staples has since Friday, or maybe even some rumors of a merger?  Well that is a bit of a stretch.

Office Depot Inc (ODP) is currently trading at $5.73 up 29 cents on the day so far. The 52 week high for ODP is $5.85, while the low is $3.84 so it’s been pretty range bound.  This trader seems to think it’s time for ODP to break out of that range.  Office Depot Inc (ODP) isn’t scheduled to report earnings until November 3rd so this isn’t an earnings play.  If ODP reacts like SPLS did to that call buying Friday and Tuesday, we think ODP could be a nice winner.  So we are in along for the ride, if any.