Calls sold in Coca-Cola Enterprises

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Coca-Cola Enterprises has been drifting lower since mid-April, and one investor apparently doesn't think that it will start rallying for at least another month.

CCE Chart optionMONSTER's tracking systems detected the sale of 4,100 July 27.50 calls for an average premium of $0.375 against open interest of 2,437 contracts. An equal number of June 27.50 calls were purchased at the same time for $0.05 against open interest of 6,949.

The trade apparently resulted from an investor rolling a short position in the calls forward by one month, letting him or her collect a net credit of $0.325. It may have been implemented by a shareholder looking to earn income from their position in the stock or represent an outright naked bet that CCE will remain below $27.50 through July expiration.

CCE rose 0.26 percent to $26.95 in early afternoon trading and is down 6 percent since hitting a six-year high of $28.93 on April 14. The stock gapped higher in late February after agreeing to sell its North American operations to Coca-Cola.

Under the deal, KO will absorb $8.8 billion of CCE's debt and pay the bottler $4 billion in cash. CCE will also buy some of KO's European assets, so the resulting company will be more exposed to Europe while KO will be more focused on the U.S. market.

Today's short call roll pushed total options volume in CCE to more than triple the daily average.

(Chart courtesy of tradeMONSTER)



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: CCE , KO

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