Downside play in Green Mountain

optionMONSTER

A trader is positioning for a possible drop in Green Mountain Coffee Roasters even as it trades near highs.

optionMONSTER systems show that a trader sold 2,800 September 75 puts for $1.03 against previous open interest of 10,136 contracts. Seconds later, he or she bought 2,800 November 75 puts for the ask price of $4.05 in volume far above that strike's open interest of 259, indicating that it is a new position.

This could be a new calendar spread but is more likely a roll, with the trader selling the position in September to buy a few more months for the strategy to work. The new puts are looking for GMCR to fall below $75 by mid-November, but they will expire worthless if shares stay above that level. (See our Education section)

GMCR is up 4.11 percent to $87.40, which would be its highest close since October 2011. The high-flying coffee company, which was down at support at $75 only two weeks ago, hit an intraday high of $88.63 on Monday.


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