On the day 4,000 DPZ Dec 140/130 put spreads traded for 1.75 to 1.80 a spread.?
Domino?s Pizza Inc., trading 151.40 up 1.10 and with an IV30 of 31.97, has earnings on the 18th of this month.? The stock has an ADV of 1067 and an OI of 24,844 contracts.? Today over 8600 puts have traded almost all of its in one put spread.? A customer bought the 140 puts expiring in December and sold the 130 puts creating a put spread.? On the day 4,000 of these put spreads traded mostly around 1.75 to 1.80 a spread.?
This spread appears to be a play on the underlying seeing pressure in the near term? The spread wants DPZ to drop from its current price down toward 140,? a move of over 6% and does its best with a move lower of at least 12%.? This could be a hedge for a long position as well, although there was not stock done with these trades which were traded in small blocks on the CBOE COB.
This trade is bearish the underlying and bullish volatility.