Bears Keep Betting as Things Get Worse for Keurig

Keurig Green Mountain Inc (NASDAQ:GMCR) has had a horrible few months, and bears are betting on more downside

Jun 12, 2015 at 10:53 AM
facebook X logo linkedin


It's been an abysmal few months for Keurig Green Mountain Inc (NASDAQ:GMCR). Since touching an all-time high of $158.87 in mid-November, the stock has been in free fall, losing nearly half its value since. That trend is continuing today, with GMCR down 2.2% at $82.43, after earlier hitting an annual low of $80.83. What's more, option traders are betting on extended losses for the coffee brewer.

Puts are running at double the expected mid-morning pace. The most popular strike is the June 85 put, with signs pointing to possible buy-to-open activity. By purchasing the puts for a volume-weighted average price (VWAP) of $3.68, traders are looking for GMCR to fall below $81.32 (strike less VWAP) before the options expire at next Friday's close.

This increased attention on put buying is just more of the same from the security's option traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GMCR has amassed a 10-day put/call volume ratio of 0.96, which is higher than four-fifths of readings from the past year.

This pessimism has spread outside the option pits, as well. During the last two reporting periods, short interest jumped by almost 34%, and now accounts for over 9% of GMCR's float. In fact, over the past three months, short interest on the equity has nearly doubled.

Today's dip was sparked by a downgrade at UBS, which cut its rating Keurig Green Mountain Inc (NASDAQ:GMCR) to "neutral" from "buy," and slashed its price target by $28 to $86. There's still some hope for GMCR shareholders, though. The stock's 14-day Relative Strength Index (RSI) is now at 27, in oversold territory.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI