Options Trading News

June 19, 2013  Wed 5:15 AM CT

FedEx reports earnings today before the bell this morning, and traders are looking for the stock to deliver.

optionMONSTER's Heat Seeker program detected a roll up from the June 105 calls to the July 110s. They sold the 105s for $0.52 and bought the 110s for $0.59, so the transaction cost a net $0.07.

These long calls lock in the price where they can buy shares in the parcel company, providing cheap exposure to a rally. They can also generate some nice leverage if the stock pushes higher. (See our Education section)

FDX rose 1.09 percent to $99.48 yesterday. The company is in the process of trying to adjust as customers slowly move away from the most expensive express-delivery services, partly by controlling costs.

Rolling those contracts out to June also helped them avoid losing money into expiration this Friday. Calls outpaced puts by 24,000 to less than 13,000, a reflection of the bullish sentiment.

Total option volume in the name was 8 times greater than average in the session.

Disclosure: I own FDX calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
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I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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