Markets

Bull wants another slice of Domino's

Domino's Pizza has been running higher, and one investor is coming back for seconds.

optionMONSTER's Heat Seeker tracking system detected the purchase of 5,250 April 18 calls for $0.65. An equal number of March 17.50 calls were sold at about the same time for an average premium of $0.325, so the transaction had a net cost of $0.325.

Volume was below open interest in March but not in April, indicating that an existing long position was rolled forward by one month. The trade gives the investor more time to ride a rally in the restaurant company, which is up 28 percent in the last six months.

DPZ climbed an additional 0.17 percent to $17.74 in morning trading today. It's been pushing higher since late 2009, when management adopted a new recipe to win back customers.

The last earnings report on March 1 matched forecasts, but management expressed concern about rising costs for products like wheat and cheese. Since that time, however, food commodities have plunged in value, which may cause some investors to think DPZ still has a bright future.

The stock also seems to have consolidated firmly above the $16 level where it peaked last year, which some chart watchers may consider bullish.

Overall option volume in the name is 17 times greater than average so far today, with calls accounting for the entirety 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.


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

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