Market News

November 22, 2016  Tue 8:02 AM CT

At least one investor is betting on a rebound in TripAdvisor by Christmas.

OptionMonster's tracking program detected the purchase of 1,500 December 52.50 for $1.30 and the sale of 1,500 December 55 calls for $0.55 yesterday. Volume was above open interest in both strikes, showing that these are new positions.

This vertical spread is looking for TRIP to rally above $52.50 by expiration. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $55. (See our Education section)

TRIP rose 1.75 percent to $51.68 yesterday but is down 18 percent in the last month. The travel-review site reported bearish quarterly results on Nov. 8.

Overall option volume was about average in TRIP yesterday. Calls outnumbered puts by a bullish 11-to-1 ratio.

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