OptionsHouse

Options Trading News

May 9, 2014  Fri 10:32 AM CT

MNST: SEE CHART GET CHAIN FIND STRATEGIES
Monster Beverage is facing a downside position after reporting earnings yesterday.

optionMONSTER's Depth Charge system has detected the purchase of 2,700 June 65 puts for $2.25 to $2.35 in less than 2 minutes this morning. Open interest was just 772 contracts before the trade appeared, indicating that this is a new position.

These puts lock in the price where MNST shares can be sold no matter how far they might fall. The trader could be using them to hedge a long position or to make an outright bearish bet, but either way they will expire worthless if the stock remains above $65 through mid-June. (See our Education section)

MNST is down 1.01 percent to $65.45 after beating earnings expectations but missing revenue forecasts in its quarterly report yesterday afternoon. The beverage company had been trending lower since hitting a two-year high of $75.63 in late February but bounced near its 200-day moving average a month ago and has been trading in an increasingly tight range since.

Total option volume in the name already tops 6,300 contracts, more than triple its full-session average for the last month. Overall puts outnumber calls by more than 2 to 1 in the session so far.
Share this article with your friends


OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »