Beyond Meat could soon see a move beyond imagination.
Shares of the alternative meat company have been soaring since its initial public offering, up nearly 300% from their starting price of $25. 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 "Options Action." "That might account for the very unusual trade we saw today."
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 of Stitch Fix, another stock considered by many to be a risky bet.
But, 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.
Guy Adami, director of advisor advocacy at Private Advisor Group and a trader on CNBC's "Fast Money," said that those who bought Beyond Meat at the outset should think carefully about their next move.
"If you were fortunate enough to get in this stock, let's say, at $50 right after it opened at $46, you have now doubled it," he said Wednesday on "Options Action." "If you sell half your position, you're in it for free."
Adami's advice? "Trade the stock, don't let the stock trade you. Get out of half before earnings."
Beyond Meat's stock was down nearly 3% in late-morning trading Thursday.