One trader wants protection on Wyndham Worldwide with the hotel
stock near all-time highs.
optionMONSTER's Depth Charge monitoring system detected the
purchase of 2,500 August 43 puts for $2.65. Equal-sized blocks were
sold at the same time in the August 38 puts for $1.05 and the
August 47 calls for $1.80. Volume was above open interest in all
The transaction resulted in a credit of $0.20 and will earn a
maximum profit of $5 if WYN closes at or below $38 on expiration.
It was probably the work of an investor seeking to guard against a
pullback. He or she is also now obligated to exit their position
for $47 if it closes above that level on expiration.
WYN fell 0.09 percent to $44.64 on Friday, and is up almost 50
percent in the last six months. The company has been riding a wave
of strong earnings reports and stock buybacks. It's also enjoyed an
inflow of capital because it has typically traded at lower
multiples than industry rivals.
The stock broke above its mid-2007 highs around $39 in January.
Some chart watchers may now expect a pullback to that old level --
an event Friday's strategy would hedge against.
Overall options volume in WYN was almost quadruple the daily
average 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.