Beer Stock for Options Bears to Crack Open

TAP options can be had for a bargain right now, too

Aug 7, 2020 at 12:34 PM

Despite a positive earnings reaction last Thursday, July 30, the shares of Molson Coors Beverage Co (NYSE:TAP) are being rejected by their 80-day moving average. Moreover, quantified data shows the stock tends to fall after encountering that same trendline. With TAP currently sitting below its 2011 and 2012 lows, there's additional pressure facing the security.

TAP August 7

Short sellers have been headed for the exits since February, with short interest down 35% since then. At the same time, TAP has taken a 33% hit on the charts, underscoring its technical weakness on the charts.

The good news is that the equity sports attractively priced premiums at the moment, with its Schaeffer's Volatility Index (SVI) of 39% ranking in the 22nd percentile of its annual range. Finally, our recommended put contract has a leverage ratio of -4.5, and will double in value on an 18.7% rise in the underlying stock.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this TAP commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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