A Pairs trade starring Monster & Green Mountain

Now that we’ve seen $KO make an investment in $GMCR I thought I would poke around to see what company’s stock saw some weakness in the industry. One of the interesting Ratio charts I noticed this weekend was with $MNST & $GMCR:

MNST_GMCRAmazing to see it fall right down to the September lows & put in a Doji on Friday. I like being long this pair for some mean reversion and Options look like the best choice:

  • Go long March Calls (or a Spread) on $MNST
  • Go long March Puts (or a Spread) on $GMCR
  • Risk defined, Reward can be zero to a lot