Unusual Options Activity: Anheuser-Busch Inbev (BUD)

Big bet on shares rallying through January.

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  • On Monday, a bullish bet was made on Anheuser-Busch Inbev (BUD), maker of Budweiser and other beverages and spirits. The bet was on the January 2020 $90 call options on the stock, expiring 171 days from now.

    Over 15,000 of these contracts traded, against an open interest of 1,233, making for a 12-fold surge in volume on the option.

    Even more unusual is the fact that shares currently trade around $101, making the option about $11 in-the-money. It should move higher penny-for-penny with shares. At a current price around $14.00, there’s only about $3 per contract in time premium, which seems like a small amount for the time involved relative to other options expiring that are also in-the-money.

    Action to take: Shares of the company are near a 52-week high and seem a bit bubbly around 27 times earnings. However, the company’s high-profile brands and earnings power make it a potentially good investment over the next few months.

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  • Shares may rise on general bullishness from an interest rate cut as early as this week, or shares may hold up as a defensive play should the rest of the market pull back. Investors could buy shares and get a 2 percent dividend, or speculate on the January $90 calls as well.



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