Large Risk Reversal Trade in Wendy's (WEN)

Shares of Wendy’s Arby’s Group Inc. WEN are higher on the session by 2.67%, currently trading at $4.62. The stock has been moving largely sideways for the past five months, though has been attracting bullish activity as of late. One large options trader is placing one large bet on the name today. The January 2011 $4/5 risk reversal was just bought 30,000 times by 20,000 times. Volume did not exceed open interest on either strike. This is an opening transaction, though, because all of the open interest is from a trade that was executed yesterday, which was exactly the same as the one traded today. Note that WEN usually trade less than 1,000 calls and puts per day, so this volume is HUGE. Wendy's/Arby's Group, Inc. is the parent company of its wholly owned subsidiary holding company, Wendy's/Arby's Restaurants, LLC. Wendy's/Arby's Restaurants is the parent company of Wendy's International, Inc. and Arby's Restaurant Group, Inc., which are the owners and franchisors of the Wendy's and Arby's restaurant systems, respectively. For more great research like this, as well as how to play it through options…please visit Benzinga’s Options & Volatility Edge and Benzinga’s Cash Generator.