Bears hit Central European Distribution
David Russell | [email protected]
optionMONSTER's Depth Charge monitoring program detected the purchase of some 1,900 December 1 puts for $0.15 and $0.20. Volume is triple previous open interest in the strike, which indicates that new money is being put to work in wagers against the stock.
vCEDC, which is based in New Jersey and sells Vodka in Eastern Europe, has been dropping since 2008, when it peaked over $70. It's down another 16 percent to $1.75 in afternoon trading today.
Based on today's put buying, traders think the losses may accelerate over the next six weeks. CEDC's debt load is about 10 times its market capitalization and cash reserves, so bankruptcy or a highly dilutive capital-raising are possibilities.
Overall option volume is 9 times greater than average in the name so far today, according to the Depth Charge. Puts accounted for more than four-fifths of the total.