Green Mountain Coffee Roasters (Nasdaq: GMCR) has been on a wild ride this year, and we have been watching it closely. This week, our vigilance paid off.
The Set Up
Volatility has been the trademark of Green Mountain for months, and since peaking this year in the $130’s (thanks to a sizable investment by Coca Cola) the stock had been spiraling lower. It missed earnings estimates, and many analysts opined that it was heading toward the drain.
After the company beat earnings in November, we began discussing the name in the chat room quite a bit – especially after seeing some impressive call flow. Then January and April calls hit the board (at the money and out of the money), and we ventured in and bought some Jan 50 calls at $4 each (see timestamped email below).
Then we waited.
The Big Win
On Monday, December 7, Santa Claus arrived early for us at Explosive Options. There was a buyout offer for Green Mountain at $92 per share, all cash. The calls we held shot through the roof, and we sold them at $40. That is a 1,000% return on a trade we only held for three weeks! (See email below.)
Imagine if you had owned three contracts. You would have had $1,200 at risk – and you would have cashed out for $12,000. In fact, we had some subscribers who nailed this one BIG TIME! Here’s an email I received from one of them:
On Dec. 3rd, I bought 50 GMCR CALLS. Bought 7 GMCR Mar 18 2016 65.0 Call @ 2.44 and Bought 43 GMCR Mar 18 2016 65.0 Call @ 2.45. Sold today for 25. Sold 50 GMCR Mar 18 2016 65.0 Call @ 25Thank you so much. I got lucked out with the purchase of GMCR calls.
Do the math – he made $112,750 on ONE TRADE!
Now, these trades are not common, but we put ourselves in position to take advantage of them by analyzing the charts, technicals, and option flow. Nothing is perfect, of course, and it’s impossible to have a guaranteed winner. However, if you’re willing to take some risk, you can get paid handsomely. As we like to say, “You cannot steal second base with your foot on first!”
Don’t Miss Our Next Big Winner
We just launched our annual holiday promotion today, so this is the perfect time to join Explosive Options. When you buy an annual Explosive Options or Chat/Explosive Options Combo membership, you’ll get an extra three months FREE! Learn more here – and join today so you don’t miss out on our next big winner!
