Options Trading News

May 7, 2012  Mon 11:06 AM CT

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.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »