Traders bet on a 'very severe' spike for Beyond Meat on earnings

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The skyrocketing stock of Beyond Meat could move even more on the alternative meat company's first-ever earnings report, according to the options market.

. Now, with its first-ever earnings report as a public company on deck for Thursday after the closing bell, some traders are betting it could go even higher.

"The options market's implying a very big move here, about 14%," Mike Khouw, co-founder and chief strategist at Optimize Advisors, said Wednesday on CNBC's "The trade was a purchase of the June $155/$160 call spreads for 15 cents apiece. This is a bullish bet targeting a move of about 60% higher for the stock in the next two weeks.

"Consider how far out of the money that is," Khouw said. "The buyer of that obviously is expecting some kind of a very short-term and very severe spike, and that could be betting on some kind of short-covering after they report earnings." Some version of that could play out given that Beyond Meat's short interest — the amount of shares currently sold short — is around 35%, higher than that ofBut, for now, "because of that high short interest, the options market is predicting that [Beyond Meat's stock] is going to go a little bit lower [in] June and July, maybe 4 to 6%," Khouw said.

 

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There is a lot of potential there. And many are focused on the fact that they are unable to keep up with demand. But they are still selling a food commodity for less than it costs to produce it and they have no way currently of changing that.

Beyond Meat! First try of the meatless burger Smells like a mix of popcorn and liver cooking and a bit tricky to cook but I loved the taste and it is soy and gluten free!

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