Bulls wait for FedEx to deliver today
Pete Najarian | [email protected]
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.)