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Option Brief: American Airlines Group Inc (NASDAQ:AAL) call volume has more than doubled its average intraday pace this morning. What's more, the number of calls traded outstrips puts by a greater than 8-to-1 margin.
Attracting the most attention is AAL's June 37 call, where 3,212 contracts are on the tape. The majority of these traded as a single block of 3,000 contracts -- just after the opening bell -- at the ask price of $3.50. Implied volatility ticked 1.1 percentage points higher on the big transaction, and data from the International Securities Exchange (ISE) confirms the lot was bought to open.
Based on the facts above, this morning's headline speculator anticipates AAL will continue to fly north of $37, and be sitting above $40.50 (strike price plus the premium paid) when June options expire. Should that happen, it would mark a new record high for the stock, which debuted last December after AMR Corporation and US Airways Group Inc merged. However, even if the shares dive below the strike and the options expire out of the money, the trader will simply forfeit his initial cash outlay. At last check, AAL shares were 1.9% higher at $38.65.
From a fundamental perspective, American Airlines Group Inc (NASDAQ:AAL) is scheduled to step into the earnings confessional the week of April 14. The last time around, the company posted better-than-expected bottom-line results, helping the shares to gain 12.5% in the subsequent week.