Options Trading News

November 26, 2013  Tue 3:16 AM CT

U.S. Airways has soared to multi-year highs, and one large trader is betting that any pullbacks will be limited through early next year.

optionMONSTER's tracking systems detected the sale of 11,811 January 24 puts in a single print for the bid price of $1.67. The trade was above the previous open interest of 10,695 contracts, showing that it is a new position.

The put seller will keep the $1.67 credit as profit if LCC remains above $24 through expiration in mid-January. The trader will be on the hook to buy shares below this level, though that may be the intent if he or she is hoping to pick up the stock at an effective discount of $22.33. (See our Education section)

LCC was down fractionally yesterday to close at $24.24. The airline carrier has surged 50 percent in the last three months, spiking to a six-year high of $25.49 on Nov. 12, but has stalled at current levels in the last week.
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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