Options traders are loading up on airline stocks AAL, UAL
Delta Air Lines Inc (NYSE:DAL) stock is up 12.4% to trade at $56.99 today, after the airliner's top-line beat for the second quarter. More importantly, CEO Ed Bastian told CNBC that bookings have stabilized after lower demand in the spring, and Delta's profit outlook for 2025 has been reinstated. The report has sent tremors through the airline sector.
American Airlines Group Inc (NASDAQ:AAL) stock is 14% higher to trade at $13.13, last seen trading at its highest level since early March. While the shares are down 25% year-to-date, they are now 51% off their April 4 multi-year low of $8.50. Keep an eye on AAL's 200-day moving average today, which so far is capping the rally.
AAL calls are all the rage today, with 286,000 changing hands at last check, volume that's 4 times the average intraday amount. The weekly 7/11 12.50-strike call is the most popular, as is the July 13 call in the standard expiration series.
United Airlines Holdings Inc (NASDAQ:UAL) stock is 14.2% higher to trade at $91.57, eyeing its highest close since March 4. Now only down 6.5% in 2025, the shares are 92.4% higher year-over-year, and today's gap has cleared their 160-day moving average.
At last check, 78,000 UAL calls have changed hands, volume that's quadruple the average intraday amount. Leading the charge is the weekly 7/11 87-strike call, but the July 90 call is a close second.
Sensing a pattern here? Airline stocks travel in packs. DAL, AAL, and UAL have high Schaeffer's Volatility Scorecard (SVS) readings, checking in at 99, 93, and 96 out of 100. This means they have tended to exceed options traders' volatility expectations in the past year -- a boon for would-be premium buyers.