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.
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