Traders still like Monster Beverage

By David Russell,

Shutterstock photo

The bulls can't get enough of Monster Beverage, which popped on a strong earnings report today.

optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,000 December 75 calls for $3.385. An equal number of September 72.50 calls for $1.70, but volume was below open interest. That suggests an existing position was rolled from one contract to the other.

Calls lock in the price where the maker of energy drinks can be bought, letting investors cheaply control a move higher. In the case of today's activity, the adjustment cost $1.685 and provided an additional three months of upside exposure. (See our Education section.)

MNST rose 6.18 percent to $69.13 in afternoon trading, and is back to the middle of its trading range for the year. Management cited strength overseas and maintained plans to keep growing internationally.

Overall option volume was 7 times greater than average, with calls accounting for a bullish 80 percent of the total.

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

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

This article appears in: Investing Options
Referenced Stocks: MNST

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