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• GMCR 77% Rate It

Green Mountain Coffee Roasters had been ground up and left for dead, but yesterday bullish activity began brewing again.

optionMONSTER's tracking systems detected a surge of bullish activity in the coffee company yesterday, with 10,000 November 25 calls purchased for $2.08. A block of 10,000 November 30 calls were also sold for $0.65 and 5,000 December 25 puts were sold for $3.08.

Owning those 25 calls locks in the price where the investor can buy the stock, while selling the 30s obligates him or her to unload it for $30 if it goes above that level. The sale of the December puts brought in even more money but could be painfully costly if GMCR drops because the trader is now on the hook to buy shares if they tank below $25. (See our Education section)

The net result is that the investor collected $110,000 to open the position and will collect an additional $5 million if the stock closes above $30 at expiration on Nov. 16.

GMCR rose 6.29 percent to $23.66 yesterday but is still down by more than two-thirds in the last year. Shares plunged in May after the company slashed guidance but have been trading sideways since then. Short interest is also a hefty 38 percent of the float, which could provide a caffeine jolt to the upside.

Total option volume was 5 times greater than average in yesterday's session.

(A version of this post appeared on InsideOptions Pro yesterday.)

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