Wyndham Worldwide has been meandering sideways for months, and
one investor thinks it will continue to drift.
optionMONSTER's tracking systems detected the sale of about 5,000
each in the May 31 calls for $1.20 and the May 30 puts for $1.50.
Volume was more than 6 times open interest in both strikes.
The trade produced a credit of $2.70. Known as a "short strangle,"
it's designed to profit from the shares remaining between the two
strike prices. Thanks to the income earned, however, they can
endure a drop as low as $27.30 or a push to $33.70 without losing
WYN rose 0.23 percent to $30.53 in afternoon trading. The operator
of hotels and time-shares beat forecasts the last time it reported
earnings on Feb. 9, and has been a darling among investors since
bottoming out near $3 in early 2009. Its brands include Ramada,
Howard Johnson and Days Inn.
The stock has now returned to a level where it peaked and bounced
several times in the second half of 2007, which could make some
chart watchers expect a period of consolidation before it continues
Total options volume in the name is 11 times greater than average.
(Chart courtesy of tradeMONSTER)
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