Options Trading News

October 23, 2012  Tue 3:47 AM CT

Hertz has been stuck in neutral for months, but one trader is betting that it will shift into high gear.

optionMONSTER's Heat Seeker system detected the purchase of 4,000 December 14 calls in a single print for $1.15. The volume was nearly 5 times open interest in the strike at the beginning of the day, so this was clearly a new position.

HTZ slipped a penny yesterday to close at $14.33. The car-rental giant gapped higher and drew repeated call buying after Dollar Thrifty accepted the company's buyout offer in late August, but shares have traded sideways since then.

Yesterday's long calls are looking for the stock to gain roughly 6 percent by mid-December. The trader could sell those options earlier at a profit in the event of a rally, but they will expire worthless if the shares don't move.

Calls outnumbered puts by more than 8 to 1, a reflection of the bullish sentiment.
Share this article with your friends

Related Stories


Pain seen in Hertz as Avis drops

November 3, 2015

Traders are buying puts in the car-rental giant as rival Avis falls sharply after quarterly results missed estimates.


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 »