I had picked up a small covered call on GMCR at 43 and change sold the 44's. Unwound it last week for a grand. Good timing. The report missed expectations and with all the hype on the company it took a 40% beating to well below 52-week lows. All the GMCR hype is what made me open the covered call as their was a good premium on the options. Shorts made big money this morning! 400% and above in some cases.
So, the report wasn't super terrible just couldn't meet the WS expectations, so what does this mean? Is it time to take advantage of this, is it really a20% stock, did it deserve to lose 3B in value today?
Everywhere I look there are K-Cups and Keurigs with no slow down or need to replace with a Starbucks machine. Today may be worth picking up some LEAP Calls at a discount.
GMCR announced their hardest thing was determining demand for their product. This may be an information arbitrage situation setting up for some quick profits!
Happy Trading!
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