New Age Beverages Stock Scales Nasdaq After Global CBD Launch

The product line will feature creams, lotions, and oils, and will be sold worldwide

Patrick Martin
Apr 25, 2019 at 9:57 AM
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New Age Beverages Corp (NASDAQ:NBEV) is near the top of the Nasdaq this morning, up 5.6% to trade at $5.82, after the company announced the global launch of its cannabidiol (CBD) product portfolio. The range of products include CBD creams, lotions, and oils, and will be sold worldwide. 

New Age Beverages stock is on track for its best day since April 8, when a 38.6% surge ensued after news of a Walmart (WMT) team-up. Since that bull gap, though, the shares pulled back and consolidated below their 50-day moving average, a trendline set to be toppled today. In the last 12 months, NBEV has now more than tripled in value, but remains well off  its Sept. 21 record high of $9.99.

A round of short covering could keep the wind at NBEV's back. Short interest increased by 17.6% in the two most recent reporting periods to a record high 19.99 million shares. This represents a whopping 35.8% of NBEV's total available float, and nearly a week's worth of buying power, going by the average daily trading volume. 

Some of these shorts may have initiated an options hedge against any upside risk. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows speculative players have bought to open 20,428 calls in the last 10 sessions, compared to 3,626 puts.

Whatever the motive, now looks to be a prime time to buy premium on New Age Beverage stock options. Specifically, the security's Schaeffer's Volatility Index (SVI) of 89% stands stands in the 5th percentile of its annual range. This means that near-term options are currently pricing in low volatility expectations. 


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