Tempur-Pedic Options Pop as Shares Hit New All-Time High

TPX - Tempur-Pedic International, Inc. – The maker of premium mattresses and pillows popped up on our scanners at the start of the trading session with options activity that’s anything but sleepy. Shares in Tempur-Pedic International jumped 17.6% this morning to secure an intraday- and new all-time high of $59.98 after the company raised its full-year guidance and said it expects to report strong first-quarter results in its announcement after the close on April 20, 2010. The company is expecting to earn $2.80 to $2.95 a share on sales of $1.31 to $1.36 billion for the full year, which is far greater than the average analyst estimate of $2.72 a share on revenue of $1.26 billion. Fresh bullish positions were initiated at the April $60 strike, where more than 2,200 calls changed hands on previously existing open interest of just 8 contracts. It looks like the majority of these calls were purchased for an average premium of $0.50 a-pop, which positions buyers of the contracts to profit above an average breakeven price of $60.50 through expiration next Friday. Investors picked up another 255 calls at the higher April $65 strike for an average premium of $0.10 each. Open interest patterns in the front month suggest some options traders established bullish stances on Tempur-Pedic well in advance of today’s sharp rally in shares. It looks like traders picked up around 630 calls at the April $50 strike for an average premium of $1.64 each back on March 16, 2011. These now deep-in-the-money calls tout an asking price of $9.00 each as of 11:30am in New York. Just one week ago, on April 1, open interest in calls at the April $55 strike suggests some 1,400 call options were purchased for an average premium of $0.15 each. Investors looking to buy those same calls today face an asking price of $4.00 per contract. Analysts at Piper Jaffray reportedly raised their share price target on TPX to $68 from…