Options Trading News

November 12, 2013  Tue 5:14 AM CT

Option volume was off the charts in AAR yesterday, with traders looking for multi-year highs by early 2014.

optionMONSTER's Heat Seeker system showed heavy buying in the February 35 calls, with initial blocks fetching $0.55 and large trades later going for up to $0.89. Almost 4,200 contracts traded against previous open interest of just 12 contracts, so new money was clearly put to work.

These long calls lock in the price where shares can be purchased in the diversified provider of products and services to the worldwide commercial and defense aviation markets. Traders use them to cheaply position for a rally or to leverage otherwise small moves. (See our Education section)

AIR rose 1.09 percent to $30.52 yesterday and has been progressing nicely higher despite weak earnings. The stock touched $30.81 at one point yesterday, its highest level in more than two years.

Total option volume was 40 times greater than average in the session, with calls outnumbering puts by more than 600 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)
Share this article with your friends

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »