Bulls Score Big Profit on Monster Beverage Stock

At the time of our recommendation, MNST options were affordably priced

Deputy Editor
May 17, 2023 at 12:40 PM
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Last week, Schaeffer's Weekend Trader subscribers doubled their money with our Monster Beverage Corp (NASDAQ:MNST) June 52.50 call. Below, we'll dive into the telling points for this bullish bet on the energy drink giant. 

When the recommendation was made on April 2, Monster Beverage stock had broke out of a large four-month basing pattern and found support at the year-to-date breakeven level. The shares were also above the round $50 level, which was the round $100 level prior to the stock's 2-for-1 split on March 28. 

MNST saw little call open interest after the 55-strike, which mostly evaporated after April's expiration. Plus, the equity's gamma-weighted Schaeffer's open interest ratio (SOIR) of 1.04 has previously been indicative of bottoms in price in the past. 

Monster Beverage stock’s implied volatility (IV) also stood out, at a relatively low 13th percentile of its annual reading. This means the security saw attractively priced premiums at the time of the recommendation. 

From April 20 to May 3, MNST ripped off a 10-day win streak. The shares opened Monday April 3 trading at $53.58, and finished closed Tuesday May 2 at $57.54, a roughly 7% pop in the span of a month and a half. We closed the position on May 3, allowing subscribers to collect the 100% target profit. 

MNST Chart May 172023

 

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213.3% GAIN on AutoNation calls
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