Domino's Pizza is pushing all-time highs, but one investor isn't
expecting a major breakout.
optionMONSTER's tracking programs detected the sale of more than
4,000 December 31 calls for $0.85 to $0.95 against open interest of
just 11 contracts. The transaction mostly occurred in a period of
about five minutes, suggesting that they were the work of a single
sell calls when they own a stock
but think that its upside will be limited for a specific period.
The strategy lets them
earn income immediately
, reducing the position's cost basis, but also caps potential
profits in the event of a big rally.
In the case of today's trade, the trader is willing to accept a
maximum exit price of about $31.90. (See our
DPZ is up 7.39 percent on the day, trading at $29.92 this
afternoon. The gain came after the restaurant chain reported
better-than-expected earnings, fueled by strong comparable-store
Given that the stock is still trapped around the same level where
it peaked last month, some chart watchers may expect it to face
resistance over the intermediate term. That would explain today's
Overall option volume is 15 times greater than average so far
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.
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