Stocks quoted in this article:
Delta Air Lines, Inc. (NYSE:DAL) is down 1.7% this morning to trade at $35, as worries mount over what will happen to Russian airspace. Elsewhere, the stock's options are flying off the shelves at more than three times the typical intraday clip. Demand for short-term contracts is especially high, as DAL's 30-day at-the-money implied volatility is up 11.7% at 42.3%.
Garnering the most attention is DAL's weekly 8/29 36.50-strike call, where nearly 6,700 contracts -- including a 2,948-contract multi-exchange sweep -- have crossed the tape. According to Trade-Alert, the sweep was bought to open for $0.81 per contract, resulting in a total cash outlay of $238,788 (premium paid * number of contracts * 100 shares per contract). This amount represents the traders' maximum risk, should DAL be sitting below the strike at the close on Friday, Aug. 29 -- when the weekly options expire. Conversely, the buyer will profit with each step above $37.31 (strike plus premium paid) the underlying is perched at expiration.
On the charts, regardless of today's turbulence, Delta Air Lines, Inc. (NYSE:DAL) is a technical outperformer. The shares have advanced roughly 28% year-to-date, and were trading above $36.50 as recently as yesterday.