More upside seen for Coca-Cola Enterprises

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Coca-Cola Enterprises has been trading straight up since late 2008, and one investor is looking for more upside.

optionMONSTER's Heat Seeker tracking system detected the purchase of 3,300 June 29 calls for $0.55 and the sale of about 2,450 June 28 puts for $0.30. Volume was more than 15 times open interest in both strikes. The trade cost $108,000 and will simulate owning shares in the soft-drink bottler.

The strategy was unusual because normally investors buy and sell equal numbers of contracts. The decision to sell fewer puts may reflect a slight amount of cautiousness because it reduces their downside risk in the puts. But given the relative thinness of liquidity in CCE, the investor may have simply been unable to sell as many puts at an acceptable price.

The stock is down 0.72 percent to $28.93 in morning trading. The company transformed itself last year when it sold its North American operations to Coca-Cola and shifted its focus overseas.

While it's not fully clear why, the transaction appears to have unlocked value, and CCE is up by 68 percent in the last year adjusting for the divestiture.

CCE, which raised 2011 guidance on April 28, is now challenging long-term highs from 1998. Today's option trader apparently thinks it will accelerate to the upside after that resistance yields.

Overall option volume in CCE is 35 times greater than average so far today, according to the Heat Seeker.



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

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