Trading in Sprouts Farmers Market's shares and options surged last week ahead of a report that the natural-foods retailer was the subject of merger talks, raising questions about whether news of a possible deal was leaked. On Sunday, Bloomberg reported that the Cerberus Capital-backed food and drug retailer Albertsons had held preliminary merger talks with Sprouts in recent weeks. The swings Monday in trading of Sprouts shares come on the heels of a surge in its stock price on Thursday and Friday, and a record-breaking rush of trading in its options.

Representatives for Albertsons and for Sprouts did not immediately respond to requests for comment, while a spokeswoman for Cerberus declined to comment. Nearly 9 million shares changed hands in the final hour of trading on Thursday, making it the busiest hour of trading in at least a year.

At the same time in the options market, the last hour of trading saw roughly 15, contracts, or about 14 times Sprouts' average daily trading volume, change hands, Trade Alert said.

By Monday, the number of open call contracts on Sprouts' shares jumped to 31,, a month high, per Trade Alert.

SFM Stock Price & News - Sprouts Farmers Market Inc. - Wall Street Journal

Sprouts has seen bursts of bullish call flow before, and with peer Whole Foods Market having been mentioned as a potential candidate for a deal in the recent past, it's likely traders were on the lookout for any signs of unusually well-informed call buying, Schwartz said.

Still, the activity gave options traders a strong belief in a near-term catalyst for Sprouts shares, Recon's Kelly said. The sharp spike in Sprouts share price made for big gains for some timely options trades. Securities and Exchange Commission declined to comment on the trading activity.

Sprouts Farmers Market (NASDAQ:SFM) Stock Price, News & Analysis

China relations China Invites Ivanka Trump and Jared Kushner to Visit. Pedestrians walk outside Sprouts Farmers Market on June 26, , in Wheat Ridge, Colorado. Sprouts Farmers Market Shares Surge Ahead of Report on Merger Talks.

Why Sprouts Farmers Market Inc. Stock Tumbled Wednesday -- The Motley Fool

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