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Trader bets on bounce in Constellation

Chris McKhann (chris.mckhann@optionmonster.com)

Constellation Brands has seen wild volatility since last week's antitrust action by the Justice Department, but one large trader is looking for a bounce.

A trader bought 10,000 July 32.50 calls for the ask price of $4.20 and sold the same number of the July 40 calls for $1.40, according to optionMONSTER's Heat Seeker system. The volume at each strike was more than the previous open interest, indicating that this is new positioning.

This vertical spread cost the trader $2.80, which is the amount at risk if shares are below $32.50 at expiration. The maximum gain of $4.70 would be realized if STZ is above the higher $40 strike price at that time. (See our Education section)

STZ finished the week at $32.68, up 1 percent on Friday's session. The alcoholic-beverage company fell from above $39 a day earlier on the news of the antitrust case. Shares had been trending higher from below $20 in June and had posted an all-time high of $39.65 on Wednesday.

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