Kraft Foods Inc. (KFT: sentiment, chart, options) was a popular target in the options pits on Wednesday, as the stock received a halo lift following a strong earnings report from sector peer General Mills (GIS). According to WhatsTrading.com, the consumer staples concern saw roughly 13,000 puts cross the tape, almost seven times its average single-session volume of fewer than 2,000 contracts. On the flip side, KFT saw about 6,600 calls change hands, more than doubling its average daily volume of 3,204 contracts.

Digging deeper into the data, it seems the stock was the center of a straddle strategy. At 1:04 p.m. Eastern time, several blocks all marked "straddle" totaling 240 July 27 puts and 240 July 27 calls changed hands. The puts crossed for $0.33, between the bid and ask prices, while the calls traded for $0.32, closer to the ask price at the time, suggesting they were likely bought. If so, the net debit on the position would be $0.65, or $65 (x 100 shares).

In order to profit, the straddle strategist needs the shares of KFT to rally past the $27.65 level (strike + net debit paid) or backpedal below the $26.35 level (strike net debit paid) by options expiration on Friday, July 17.

In late morning activity, the stock is hanging out in the $26 neighborhood, a deficit of 60 cents, or 2.25%, from yesterday's close. From a longer-term perspective, the blue chip is poised to close the month atop its 10-month moving average for the first time since September 2008.