United Continental has been working its way higher, and the bulls are on board.
optionMONSTER's Heat Seeker tracking program detected the purchase of about 3,300 May 24 calls for $0.27 and the sale of an equal number of May 23 puts for $0.63. Volume was above open interest at both strikes.
The trader collected a credit of about $0.36 and stands to benefit from a rally in the next two weeks. They'll make money on the calls if the airline stock climbs and lose money on the puts in the event of a drop. The position will expire worthless if shares remain between $23 and $24.
UAL is up 6.19 percent to $23.66 in midday trading and is up 10 percent in the last month. Airlines have been quietly outperforming the broader market recently after carriers including UAL, JetBlue, Delta Air Lines, and Southwest reported better-than-expected quarterly results. (See researchLAB for more)
Overall option volume in UAL is more than twice the average amount so far today.
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UAL
Calls target historic level for UAL
May 15, 2013
Long-term calls are essentially looking for shares to return to the level where the airline carrier peaked in 2007, before the 2008 market crash sent it spiraling below $4 in the next two years.
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