{"id":63391,"date":"2025-02-25T02:00:21","date_gmt":"2025-02-25T07:00:21","guid":{"rendered":"https:\/\/www.tradestation.com\/insights\/?p=63391"},"modified":"2025-03-12T11:02:03","modified_gmt":"2025-03-12T16:02:03","slug":"options-lamb-weston-puts","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2025\/02\/25\/options-lamb-weston-puts\/","title":{"rendered":"Options Alert: Traders Eye Downside in Potato Giant"},"content":{"rendered":"<p>Lamb Weston has been falling for years, and at least one big trader may see further downside.<\/p>\n<p>This large transaction was detected yesterday in the food company:<\/p>\n<ul>\n<li>16,440 March 55 puts traded for $2.12 against open interest of 20,967 contracts.<\/li>\n<li>16,440 April 50 puts traded for $1.93 against open interest of 562 contracts.<\/li>\n<li>Both transactions occurred at the same second in the first 90 minutes of trading.<\/li>\n<\/ul>\n<p>Given the different open interests, the trader may have entered the session owning the March 55 puts. He or she likely profited from the stock losing value and rolled the contracts to the lower strike.<\/p>\n<p>Making the adjustment would have generated a credit of $0.19. It would also provide an additional month of downside exposure, while lowering the breakeven by $5.<\/p>\n<p><a href=\"https:\/\/www.tradestation.com\/insights\/2024\/05\/12\/the-basics-of-options\/\">Puts<\/a> fix the price where investors can sell a security. They often appreciate when stocks lose value, letting traders position for declines with limited risk. Options can also become worthless if they expire out of the money.<\/p>\n<p>LW fell 6.3 percent to $52.29 yesterday and has lost 49 percent of its value in the past year. That makes it the fifth worst-performing member of the S&amp;P 500 in that time, according to TradeStation data.<\/p>\n<div id=\"attachment_63397\" style=\"width: 1034px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-63397\" class=\"wp-image-63397 size-large\" src=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-1024x490.jpg\" alt=\"\" width=\"1024\" height=\"490\" srcset=\"https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-1024x490.jpg 1024w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-300x143.jpg 300w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-768x367.jpg 768w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-1536x734.jpg 1536w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a-1080x516.jpg 1080w, https:\/\/cdn.tradestation.com\/uploads\/sites\/2\/LW_20250224a.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><p id=\"caption-attachment-63397\" class=\"wp-caption-text\"><em>Lamb Weston (LW), daily chart, with select patterns and indicators.<\/em><\/p><\/div>\n<p>The Idaho potato processor surged as the post-Covid reopening fueled restaurant demand for items like frozen French fries. But it peaked in mid-2023 and declined as competition increased. The shares are now back near lows from March 2022.<\/p>\n<p>LW fell sharply on July 24 after earnings, revenue and guidance missed. Similar news on December 19 triggered more selling.<\/p>\n<p>Overall option volume was 14 times greater than average over the last month on Monday. Puts accounted for a bearish 84 percent of the total.<\/p>\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n<p><em>Options trading is not suitable for all investors. Your TradeStation Securities\u2019 account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See\u00a0<a href=\"https:\/\/www.theocc.com\/Company-Information\/Documents-and-Archives\/Options-Disclosure-Document\">www.TradeStation.com\/DisclosureOptions<\/a>. Visit\u00a0<a href=\"http:\/\/www.tradestation.com\/Pricing\">www.TradeStation.com\/Pricing<\/a> for full details on the costs and fees associated with options.<\/em><\/p>\n<p><em>Margin trading involves risks, and it is important that you fully understand those risks before trading on margin. The Margin Disclosure Statement outlines many of those risks, including that you can lose more funds than you deposit in your margin account; your brokerage firm can force the sale of securities in your account; your brokerage firm can sell your securities without contacting you; and you are not entitled to an extension of time on a margin call. Review the\u00a0Margin Disclosure Statement at\u00a0<a href=\"https:\/\/uploads.tradestation.com\/uploads\/margin-disclosure-statement.pdf\">www.TradeStation.com\/DisclosureMargin<\/a><\/em>.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lamb Weston has been falling for years, and at least one big trader may see further downside. This large transaction was detected yesterday in the food company: 16,440 March 55 puts traded for $2.12 against open interest of 20,967 contracts. 16,440 April 50 puts traded for $1.93 against open interest of 562 contracts. Both transactions [&hellip;]<\/p>\n","protected":false},"author":39,"featured_media":63395,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[28,14],"tags":[917],"class_list":["post-63391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-consumer","category-options","tag-lw","et-has-post-format-content","et_post_format-et-post-format-standard"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Options Alert: Traders Eye Downside in Potato Giant<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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