By David Russell, reporter at OptionMonster
NEW YORK -- Constellation Brands (STZ) is pulling back, and the bulls are getting in the spirit with the alcoholic-beverage company.
OptionMonster's tracking systems detected the purchase of more than 9,000 April 32.50 calls, most of which priced for $3.39. Volume was more than 600 times open interest at the strike before the trade appeared.
Long calls lock in how much investors must pay to buy a stock, so they can generate major leverage in the event of a rally. But these options can lose most or all of their value if the shares fail to move.Constellation rose 0.82% to $32.76 Thursday. It's been exploding higher since late June, when it took over selling Corona beer in the United States. The shares had fallen in the last week, and Thursday's call buyer apparently thought it was a good entry point. The trade occurred less than 20 cents from the bottom of the stock's range in the session and was followed by a rebound in the share price. Total option volume in the name was 24 times greater than average. Russell has no positions in STZ.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV