Options Trading News

November 7, 2012  Wed 3:47 AM CT

Traders are looking for a near-term rally in Dollar Thrifty Automotive, apparently believing that antitrust regulators will soon approve the company's sale to Hertz.

Nearly 10,000 November 85 calls traded in a strong buying pattern for an average price of $0.61 yesterday, according to optionMONSTER's Heat Seeker tracking system. The volume was nearly double the strike's open interest of 5,343 at the start of the session, indicating new activity.

DTG rose 4.55 percent yesterday to close at $77.37 after Hertz extended its offer to buy the car-rental company to Nov. 16. Shares gapped up to $87 from $81 in late August when the company agreed to be purchased by Hertz for more than $2.5 billion, but they erased all those gains when antitrust concerns were reported on Oct. 25.

The call buyers are looking for the stock to rise roughly 8.25 percent by expiration at the end of next week, which happens to be the new deadline set by Hertz yesterday. A gain of that size would bring Dollar Thrifty back to levels where it traded after accepting the takeover offer.

Total option volume in the name was nearly 5 times its daily average. Calls outnumbered puts by more than 3.5 to 1.
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