The grocery chain will pay up to $1.2 billion to settle claims related to the opioid epidemic
Cincinnati-based Kroger Co (NYSE:KR) stock is 4.5% higher to trade at $47.57 at last check, though it earlier fell as low as $44.32, following a mixed second-quarter report.
While the supermarket chain's profits beat expectations, revenue missed the mark. The company also agreed to pay as much as $1.2 billion to U.S. states, local governments, and Native American tribes to settle most of the claims that it helped fuel the opioid epidemic via lax oversight of pill sales. However, the company did not admit to wrongdoing.
Options traders are already responding to the event, with 28,000 calls and 20,000 puts across the tape so far, which is 18 times the intraday average. New positions are opening at the top two most popular contracts, the respective weekly 9/8 48.50- and 48-strike calls.
On the charts, Kroger stock is trading back above its descending 10-day moving average, which began pressuring the shares in mid-August. Now looking to mark its first weekly win after three losses, KR sports a 7% year-to-date lead.