One trader apparently thinks that there's no going back for restaurant operator Brinker International.
optionMONSTER's Heat Seeker monitoring system detected the sale of about 3,000 January 35 puts for $1.50 and $1.55. Volume was more than 100 times the previous open interest at the strike, indicating that new positions were initiated.
Writing puts generates income in return for a pledge to buy shares in the event of a future pullback. Investors use the strategy when they like a stock but don't want to shell out cash getting long immediately. It also programs a buy order at lower prices. (See our Education section for more on why selling puts often makes more sense than buying shares.)
In the case of yesterday's trade, that entry level would be $35--slightly below a long-term peak from early 2007. EAT ripped through it in March, which could be leading some chart watchers to believe that it will provide support going forward.
EAT fell 1.28 percent to $38.66 yesterday. The company, which owns Chili's Bar & Grill and Maggiano's Little Italy, will issue its next earnings report on Aug. 2.
Total option volume was 12 times greater than average in the session.
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