Shares of Keurig Green Mountain are going crazy again.
In afternoon trade the stock is up more than 5% on no news.
This is the second time in a week the stock has risen sharply, rising more than 8% into the close last Friday. That move had traders scratching their heads.
Risk Reversal’s Dan Nathan told CNBC on Monday that Friday’s action was curious, and said that it became a situation where “buying begets buying.”
On Monday, Keurig Green Mountain announced an agreement with Subway to bring the company’s Keurig single-cup coffee brewers to Subway restaurants in North America.
A nice partnership for the company, but not the kind of deal that drives a stock up 8%.
Last Friday, the trading in question was the buying of $US120 call options set to expire tomorrow. A call option is a contract that allows an investor to buy a stock at a set price at a future date.
Today on Twitter, Joe Kunkle, founder of OptionsHawk.com, noted that activity in Keurig Green Mountain is again notable. Kunkle said that today, traders are buying $US135 calls expiring in July.
Keurig Green Mountain has been one of the most controversial stocks in the market, and in the past has been a short idea of hedge fund manager David Einhorn.
Shares of Keurig went wild in January after Coca-Cola announced a 10% stake in the company.
Once again, we’ll be keeping an eye out.
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