Green Mountain Coffee Roasters is drawing an interesting put spread in the weekly contracts that expire at the end of Friday's session.
The trade involves 4,032 each of the 43.50 and 43 puts, with those volumes more than open interest at both strikes. The 43.50 puts traded for $0.27 and the 43 puts for $0.22, according to optionMONSTER systems. Given the trade data, it appears that the higher-strike puts were sold and the others bought in a credit spread.
This would mean that the trader is taking in a very small credit of $0.05, but with a relatively high probability of profit. The delta of the 43.5 puts is -0.18, suggesting a probability of just 18 percent that those puts will be in the money at the end of the week. (See our Education section)
GMCR is up a penny this morning to $45.54. The coffee company's shares tested resistance at $49 at the start of the month, their highest levels since gapping down on earnings results in May.
Pretty sure they had a similar post to this not so long ago (or was that on something else?)... referred to it as picking up nickels in front of the steam roller... I think it was GMCR, and it is really no surprise, the crazy IV in these options is too hard to ignore, especially when it feels like we may be in rest mode, or consolidation, or whatever you want to call it. Maybe if enough people start exploiting the IV this way it will start to evaporate and I will finally stop having to sacrifice upside for the income...