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Keurig Green Mountain, Inc. Message Board

  • theobserver1001 theobserver1001 Jun 28, 2013 11:37 AM Flag

    Join the party.. Everybody and their Brother Shorting GMCR!!!!

    Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is lower today, and is currently trading at $73.72. As such, the bears are lining up in force to bet on additional downside for the Keurig maker. Specifically, around 16,000 puts have changed hands, which is a 60% markup to the expected intraday volume.

    One of the most popular targets is the July 77.50 put, where just under 1,700 contracts have traded, 83% at the ask price. Further clarifying the transactions: Implied volatility is up 2.6 percentage points, and open interest at the strike is less than the volume, jointly suggesting the initiation of new positions.

    The volume-weighted average price (VWAP) for the puts -- many of which were scooped up this morning before the stock turned south -- is $3.56. With each successive step the stock makes below $73.94 (strike price less VWAP), today's speculators will gain. But even if GMCR bounces back above it, the most they can lose is the premium paid.

    Traders have grown increasingly pessimistic toward Green Mountain Coffee Roasters over the last couple months. The stock's 50-day put/call volume ratio is 1.21, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). That figure ranks in the 93rd percentile of its annual range, indicating puts are being scooped up at a faster-than-usual pace, relative to calls.

    The shorts have been active on GMCR, too. In the past two weeks, short interest increased nearly 3%, and it now makes up a lofty 21.8% of the coffee name's available float. The total represents nearly 10 days' worth of pent-up buying demand, assuming typical daily trading volumes.

    Why the bears are so excited about Green Mountain is a bit of an enigma. Over the past 60 sessions, the stock has bested the broader S&P 500 Index (SPX) by more than 35 percentage points. From a more long-term perspective, GMCR is up around 260% compared to where it was 52 weeks ago.

    All things considered, i

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