Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog
Stocks quoted in this article:

US Airways Group, Inc. (LCC: sentiment, chart, options) this morning reported another decline in mainline traffic in January, though the airline issue said passenger revenue per available seat mile improved about 2%. Following the news, the shares of LCC have ticked lower so far today which could bode well for one back-month option trader.

More specifically, yesterday morning, a block of 2,000 March 6 calls crossed the tape for the bid price of $0.50, suggesting they were likely sold. In addition, call open interest at the March 6 strike ticked higher overnight, pointing to potential sell-to-open activity. In fact, the 6 strike is now home to peak call open interest in the back-month series, with roughly 13,300 contracts in residence.

By writing the March 6 call to open, the seller is betting the shares of LCC will finish beneath the $6 level by the time March-dated options expire. In this best-case scenario, the call will expire worthless, allowing the bearish bettor to keep the $0.50 received at initiation.

On the flip side, LCC's February 6 call also attracted quite a bit of attention yesterday, with nearly 1,500 contracts exchanged 78% of which traded at the ask price, indicating they were likely purchased. By buying the February 6 call to open, the investor is expecting the shares of LCC to topple the $6 level by front-month options expiration.

At last check, it's a good old-fashioned nail-biter, with the airline concern surrendering 2.9% to flirt with the $5.80 region.


permalink

Featured Brokers
ADVERTISEMENT
Unusual Option Volume
Option Flow
ADVERTISEMENT
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.