JetBlue abandoned its acquisition of Spirit Airlines earlier this year
JetBlue Airways Corporation (NASDAQ:JBLU) stock is up 16.8% to trade at $7.47 this morning, amid reports that Spirit Airlines (SAVE) may file for Chapter 11 bankruptcy protection. This comes after former abandoned its acquisition of the latter amid scrutiny from the Department of Justice (DOJ).
JBLU earlier hit a 52-week high of $7.65 after bouncing off a floor of the $6.30. Shares have weaved in and out of penny stock territory this year, with their latest rally coming after a dip to their lowest level since early December. Over the past 12 months, the equity is up 59.3%.
Short sellers are already hitting the exits, with short interest down 9.4% in the most recent reporting period. The 62.58 million shares sold short still account for 20.2% of the equity's available float, though, indicating there is still plenty of room for a short squeeze to fuel additional tailwinds.
Options traders are overwhelmingly bearish. This is per JBLU's 10-day put/call volume ratio of 1.70 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than all annual readings.
Drilling down to today's options activity, 43,000 calls and 8,698 puts have crossed the tape so far, which is 18 times the intraday average volume. The October 7 call is the most active contract, with positions being opened there.