Monster Beverage (MNST) is off $7.14 to $54.06 in active trading of 10.5 million shares after the company disclosed a subpoena from the State Attorney related to the marketing of Monster Energy drink. Shares are reeling and options volume on the stock is 31,000 calls/34,000 puts. August 55 puts are the most actives, with 5,660 traded. Aug 47.5 puts, Aug 50 puts, Aug 57.5 puts, Aug 57.5 calls, Aug 60 calls, and Aug 62.5 calls, which are all expiring in a week, are seeing brisk trading. Yet, the top trades are in the March 2013 options and seem to reflect a contrary view of the situation, as an investor was apparently selling 45 puts at $3.45 to buy the 57.5 – 72.5 call spread for $4.275. The call spread risk-reversal traded 2500X and looks like a new position targeting a move back towards $60 or beyond through the March expiration.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.