Trade sees limited upside for Wyndham


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As Wyndham Worldwide trades at its highest levels in nearly four years, investors apparently think that further gains will be hard to come by.

optionMONSTER's tracking programs detected the sale of more than 2,800 June 35 calls for $0.85 and $0.90 against open interest of just 841 contracts. The trade reflects a belief that the hotel and time-share company will remain the $35.85-$35.90 range for the next two months.

WYN rose 0.79 percent to $34.27 yesterday and is up 15 percent so far this year. It gapped higher in the previous session after earnings beat consensus estimates and management raised guidance. The company, which owns Howard Johnson and Days Inn, has been one of the strongest names in the hotel sector.

Yesterday's call selling, however, reflects a belief that upside will be limited going forward. The trade obligates the investor to sell stock for $35, a price that WYN hasn't fetched since the summer of 2007. He or she is probably a shareholder looking to earn income on an existing position who's willing to sell the stock at a higher price.

Overall option volume in the name was 9 times greater than average, with call selling accounting for most of the activity.

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 Stocks: WYN

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