Green Shoot Mountain Tonight

• Posted by Adam Warner
• on July 29th, 2009

 

OK, for my next trick, going to see how uploading multiple charts will work here at our new home.

We have Green Mountain Coffee Roasters (GMCR) here, set to report after the bell tonight. At left we have a 10 Day HV over the past 6 month’s. Take away that spike on the last earnings report, and you generally have a name that moves at mid 50′s volatility.

Aug options a bit pricy in that case as they carry about a 75 IV or so into the number. Of course the very reason why is that April gap that injected a double shot of expresso here and shot this pup up over 50% in one session.

Bottom line is they’re pricing in a big move again on the number. Some names, like ISRG comes to mind, always go bonkers on earnings news. Will GMCR follow suit? I’m semi-tempted to say they overprice it, but at the same time it’s a rare spot these days that actually has a measurable volatility ramp into earnings. It’s also not an easy name to leg anything, and if sell anything, would want a spread with defined risk. So I will likely take a pass.

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