Options Traders are Bullish on Green Mountain Coffee

Options traders are increasingly bullish on Green Mountain Coffee (NASDAQ:GMCR).  The price of call options, which provide their owners the right, but not the obligation, to buy the stock at pre-determined prices, has risen.  Conversely, the price of put options, which provide their owners the right, but not the obligation, to sell the stock at pre-determined prices, has fallen.

Call options generally increase in price when bullish sentiment is prevalent, and put options generally increase in price when bearish sentiment is prevalent.  Bulls want to acquire shares; bears want to sell shares.  You can view the option chain for these shares here.

Famed short-seller David Einhorn, manager of Greenlight Capital, announced during last week’s Value Investing Congress, that his firm is short Green Mountain Coffee.  (Einhorn’s short thesis is not without its critics.)

It remains to be seen whether Einhorn’s bearish stance or option traders’ bullish stance, is the correct one for these shares.

The shares recently traded at $65.98, up $4.36, or 7.08%, on the day.  The shares have traded in a 52-week range of $29.55 to $115.98 and its market capitalization is $10.1 billion.  About the company: Green Mountain Coffee Roasters, Inc. roasts Arabica coffees and offers various coffee selections.  The Company’s products include single-origin, estate, certified organic, Fair Trade, signature blends, and flavored coffees sold under the Green Mountain Coffee Roasters brand.  Green Mountain serves offices, supermarkets, and convenience stores, and operates a direct mail business.

Competitors to Watch: Farmer Brothers Co. (NASDAQ:FARM), Peet’s Coffee & Tea, Inc. (NASDAQ:PEET), Coffee Holding Co., Inc. (NASDAQ:JVA), Starbucks Corporation (NASDAQ:SBUX), The J.M. Smucker Company (NYSE:SJM), Sara Lee Corp. (NYSE:SLE) and Kraft Foods Inc. (NYSE:KFT).

(Note: Selected financial data are sourced from Google Finance.  All data are assumed to be accurate.)

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