At least one trader apparently believes that Darden Restaurants will return to all-time highs in the next month.
optionMONSTER's Heat Seeker system shows that 2,744 November 75 calls were purchased for $0.25 at the same time on Friday. This is clearly a new position, as the volume was well above the strike's open interest of 1,648 contracts.
These long calls lock in the price where the stock can be purchased through mid-November no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $75. (See our Education section)
DRI rose 2.1 percent to $65.14 on Friday. The stock is down more than 7 percent in the last month but bounced from a low of $62.58 on Thursday, not far from the level where it rebounded sharply in early May. Friday's calls are looking for shares to revisit highs above $75 from July.
The restaurant operator, whose chains include Olive Garden and LongHorn Steakhouse, is expected to report quarterly results in mid-December.
Friday's overall option volume in the name was double its daily average for the last month. Total calls outnumbered puts by 10 to 1, a reflection of the session's bullish sentiment.
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