Trader sticks with Monster Beverage
David Russell | email@example.com
Our tracking systems detected the sale of 1,376 September 50 puts for $1.50 and the purchase of an equal number of September 42.50 puts for $0.75. Volume was below open interest in the 42.50s, which indicates an existing short position was rolled from one contract to the other.
The investor probably sold them at an earlier time to earn income. Now that the stock has rallied, he or she adjusted the position to the higher strike. They collected an additional $0.75 of income and raised the level at which they must buy shares in the high-flying beverage company.
Selling puts is a common way to make money from a stock without expending any cash. The strategy lets investors extract the time value of the options and profit as the weeks and months while away. (See our Education section)
MNST is off 0.25 percent to $64.10 in afternoon trading after hitting an all-time high on Friday. It is up more than 30 percent so far this year amid strong demand for its energy drinks.
Overall option volume is triple the daily average so far today.