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Options Trading News

December 6, 2010  Mon 1:44 PM CT

JBLU: SEE CHART GET CHAIN FIND STRATEGIES

Shares of JetBlue have jumped higher today, but the options action is in the puts.JBLU

JBLU climbed 3.41 percent $7.14 in afternoon trading. This apparently results from the carrier being included in a United Parcel Service team that won a Defense Department contract. The stock peaked at $7.60, its highest price since January 2009, but plunged almost 20 percent in a few sessions.

More than 10,000 options change hands today, split between calls and puts. This compares to an average of 2,200 contracts per day over the last month. The December 7 puts led the action, with a trader buying 5,000 for $0.15 against open interest of 1,660.

There was also some call selling in the December 7 call strike, though most of it doesn’t appear to be linked to the put buying, and it was less than open interest. The puts also don’t appear to be tied to any trading in the underlying stock. As such, it would seem that this is an outright bearish bet that JBLU will not hold these gains. It is also possible that the trader is a shareholder who wants to hedge an existing long stock gain against a potential drop.

(Chart courtesy of tradeMONSTER)

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