Party at the Molson trading post!

June 10, 2014 07:39 AM

Did someone shake-up the beer keg at Molson Coors Brewing Company? On Tuesday its shares look particularly effervescent amid a generally improving environment for its mass-market Coors Light and Molson Canadian beer brands.

Its shares traded to a record after earnings and currently stand 6.11% higher at $71.15. The exuberance behind the buying spree amongst investors has driven speculators to look for further share price gains, with option traders snapping-up call options 11.75% above Monday’s closing price.

Neither 75.0 strike options in the October nor January expirations showed much interest among option traders ahead of Tuesday’s session, but have attracted call buying of almost 6,000 contracts between them so far.

At the nearer contract call premiums have risen from 35-cents to $1.45 per contract while it now costs $2.50 to secure buying rights at the same 75.0 strike expiring in January rather than the 95-cent premium at which the option settled Monday.

Overall, today’s volume of 19,400 contracts is equivalent to approximately half of the current open interest held amongst option traders as the shares surge to new highs. Implied volatility is higher at 19.1% in the October contract from 17.2% at Monday’s close.
 


Chart – Implied volatility edges higher in October contract for Molson Coors 

About the Author

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.