Andrea Kramer (akramer@sir-inc.com) Hospitality hotshot Wyndham Worldwide Corporation (WYN) will confess its third-quarter earnings before the opening bell tomorrow. Ahead of the event, options speculators are ramping up their bullish exposure to the stock, as evidenced by the equity's 10-day call/put volume ratio of 9.59 on the International Securities Exchange (ISE). Compared to similar readings taken during the past year, this ratio ranks in the 89th percentile, implying that traders have initiated bullish bets over bearish at a faster clip just 11% of the time.
Further reflecting the growing affinity for calls over puts is WYN's depleting Schaeffer's put/call open interest ratio (SOIR), which now rests at 0.71 ? in the 35th annual percentile. In other words, short-term options players have been more optimistically aligned toward WYN just 35% of the time during the past 12 months.
Garnering the most attention has been the security's November 30 call, which has seen open interest advance by more than 2,100 contracts during the past two weeks. In fact, this round-number strike on Friday saw 1,850 calls change hands ? nearly all of which traded at the ask price, suggesting they were bought. Plus, call open interest at the front-month strike increased by close to 900 contracts over the weekend, extending the 30 strike's lead as home to peak call open interest in the November series of options.
By purchasing the November 30 calls to open, the buyers are betting the shares of WYN will muscle atop the $30 level before the options expire. At last check, the bulls' hopes appear to be close to fruition, with WYN adding 1.6% to tag a new multi-year high of $30.
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