OptionsHouse

Options Trading News

July 17, 2012  Tue 2:16 AM CT

TAP: SEE CHART GET CHAIN FIND STRATEGIES
One investor is taking a careful bet on Molson Coors Brewing, which has been fluctuating in a range for the last year.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 2,500 January 45 calls for $0.98 and the sale of an equal number of January 35 puts for $0.83. The trade cost $0.15 and will perform similarly to owning shares in the Colorado beer company.

If TAP rallies, the calls will appreciate and the puts will lose value, while the opposite will happen to the downside. The position will track movements in the shares less closely as time passes and expire worthless if they remain between $35 and $45.

There is also a relatively low danger of losing money because TAP hasn't traded below $35 since the first half of 2009. Based on that risk profile, it appears the investor is placing a low-cost bet on a rally in the near term, accepting that it may go nowhere. (See our Education section for more on how calls and puts can be used to exploit a wide range of market expectations.)

TAP fell 0.27 percent to $40.75 yesterday. Total option volume was almost 5 times greater than average, according to the Heat Seeker.

The company's next earnings report is scheduled for the premarket on Aug. 7.
Share this article with your friends


Related Stories

TAP

Molson traders look for breakout

May 19, 2015

The beer maker rallied about 50 percent between February and September of 2014 but has been trapped in a range since, with quarterly results mixed recently.

TAP

Bulls raise a toast to Molson Coors

April 27, 2015

Traders are looking for a breakout by the beer company, which rallied 50 percent between February and October last year but has fluctuated in a range since.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Archived Webinar

Education & Strategy

Short synthetic stock

With the use of the calls and puts we can not only create Long Synthetic Stock, but Short Synthetic Stock as well...

View more education articles »