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January 10, 2013  Thu 5:17 AM CT

LCC: SEE CHART GET CHAIN FIND STRATEGIES
If option traders are right, U.S. Airways may be preparing to roll down the runway and fly higher.

optionMONSTER's Heat Seeker tracking system showed heavy activity in the January 15 calls yesterday, plus the February 16 calls. The big trades were selling in the January 15 calls for $0.63 and buying in the February 16s for $0.85.

Long calls lock in the price investors must pay to buy shares, so they can generate significant leverage when their underlying stock moves. But they also lose value as expiration approaches, so yesterday's trader rolled the January position forward by a month to avoid that time decay. (See our Education section)

The trader paid about $0.22 and now has an additional month of upside exposure in the airline. LCC fell 0.2 percent to close at $15.13 yesterday, but earlier in the session it climbed to $15.50--its highest price in almost five years.

More than 57,000 contracts traded in the session, about 6 times more than average. Calls outpaced puts by 48,000 to about 9,000, which further reflects the session's bullish sentiment.

Disclosure: I own LCC calls.

(A version of this post appeared on InsideOptions Pro yesterday.)
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