Investor gets paid to wait on Wyndham

Shutterstock photo

One investor is checking in for an extended stay at Wyndham Worldwide.

optionMONSTER's tracking systems detected a surge of call buying in the hotel and time-share company, which hit a 4-1/2 year high earlier this week. Some 1,194 May 35 calls were sold for $4 at the same time that an equal number of January 33 calls were bought for $4.

Volume was below open interest in January but not May, which indicates that an existing short position was rolled from one strike to the other. The investor probably owns WYN shares and is using the options as part of a covered call strategy. (See our Education section)

Yesterday's transaction essentially cost nothing because the two premiums canceled each other out. The purpose was that the trader can now make an additional $2 on the shares. Instead of paying money for that right, the investor agreed to stay in the position for an additional four months.

WYN fell 1.47 percent to $36.87 yesterday but is up 31 percent in the last three months.

Yesterday's call roll pushed the total option volume in the name to almost triple its daily average.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options
Referenced Symbols: WYN

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