Trade sees pause in Dunkin' Brands

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One investor sees a top for Dunkin' Brands.

optionMONSTER's monitoring programs detected the sale of 2,000 September 35 calls for an average premium of $1.725. Volume was above previous open interest of 1,306 contracts, indicating that a new position was opened.

He or she probably owns shares in the company, which franchises Dunkin' Donuts and Baskin-Robbins. Selling calls against their stock allows them to collect income while still holding a long position. If it rallies above $35 the trader will need to sell the stock, but including the credit earned the exit price would be $36.725. (See our Education section)

DNKN is up 1.18 percent to $33.57 in morning trading. It's up more than 30 percent so far this year but has been stalling around its current level since early May. The company, which went public last August, beat expectations the last time it released earnings on April 26.

Overall option volume is 5 times greater than average so far in the session.



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

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


This article appears in: Investing , Options

Referenced Stocks: DNKN

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