Green Mountain Stock Options Trading Shows a 'Tell' on Earnings (GMCR)

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) is set to report earnings after the closing bell and we are seeing elevated options activity for the FEB-2012 puts and calls.  The stock is still down by more than half.  Thomson Reuters has estimate at $0.36 EPS and $1.06 billion in sales.

We have seen over 17,000 Calls trade today and more than 14,000 Puts trade today if you include the weekly and monthly expirations.  The average volume of Puts is about 5,000 contracts on days when there is no news.  Using the monthly expiration in speculative options pricing shows that options traders are braced for a move of roughly $5 to $6 per share after the earnings report.

What is interesting is that with all of the controversy the stock is up 1.7% at $54.26 ahead of earnings on 3.8 million shares (7.2 million is an average day’s share volume per Yahoo! Finance).  The last mid-January short interest showed more than 26 million shares in the short interest.

To make an example… There was the equivalent of $1.4 billion in shares short (static at today’s value) versus a market cap of $8.4 billion.

JON C. OGG