E. I. du Pont de Nemours and Company (DD), commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Éleuthère Irénée du Pont. DD is currently trading around $68.88 in a 52 week range of $56.46 – 69.75. The company’s stock has been underperforming the market this year with shares up 5.96% year to date. Options traders seem to think that this trend will continue as order flow in DD has been decidedly bullish during the last few trading sessions. On Monday, a trader bought 2000 DD Fri 9/26 65.5 Calls (Wkly) @ $0.52. This is a bullish order and involved this trader laying out $100,000 in total premium. The stock rallied today on news that Trian Fund, a significant stakeholder in DuPont, launched a campaign to break the chemical giant into two separate businesses.

The Trade:
Buying the DD Fri 9/26 65.5 Calls (Wkly) @ $0.52 debit
Risk: $52 per 1 lot

Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long

(Full disclosure: I have no position on in this stock)

Andrew Keene


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