Options Trading News

May 18, 2012  Fri 9:28 AM CT

One investor thinks that JetBlue Airways will hold its altitude for the rest of 2012.

optionMONSTER's tracking programs detected the sale of 2,560 December 4 puts for $0.50. Volume is more than 300 times open interest in the strike.

The stock doesn't need to take off for the position to make money--it simply must avoid a crash below $4. If the shares hold that level, the puts will expire worthless and the investor will keep the credit. Even if the stock goes below $4, the income received will protect the trader down to $3.50. (See our Education section)

JBLU is down 1.44 percent to $4.11 in morning trading and has lost 29 percent of its value in the last three months. That decline has pushed up implied volatility to 50 percent from the 41 percent historic level, which also favors the put seller because it suggests that options are overpriced.

More than 2,700 contracts have traded so far this morning, pushing total volume to almost twice the daily average.
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