Most Active Weekly Options: American Airlines Group Inc (AAL)

Short-term option bulls are taking aim at American Airlines Group Inc

Digital Content Group

Oct 21, 2014 at 11:22 AM

The 20 stocks listed in the table below are the S&P 500 Index (SPX) components that have attracted the highest weekly options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is American Airlines Group Inc (NASDAQ:AAL), which has seen a surge in options volume.

Airline stocks are flying high today, and American Airlines Group Inc is no exception. Shares of the Texas-based transportation company have rallied nearly 7% to trade at $37.65, and year-to-date, they're up roughly 49%.

Options traders have taken notice. In fact, intraday volume is running at double what's expected at this point in the session, and calls are tripling puts, 51,000 contracts to 17,000. Among weekly AAL options, the 11/7 37-strike call is leading the way, with 3,448 contracts on the tape. The vast majority have crossed at the ask price, implied volatility is edging higher, and volume tops open interest -- collectively pointing to buy-to-open activity. This theory is reiterated by Trade-Alert.

Thanks to today's massive rally, the weekly AAL options are now in the money. However, for the buyers to profit at expiration, the shares need to muscle north of $38.69 -- the strike plus the volume-weighted average price of $1.69 -- by the close on Friday, Nov. 7, a time frame that encompasses the company's earnings report, slated for release this Thursday morning. Historically, American Airlines Group Inc (NYSE:AAL) hasn't ended a week above that mark since late August.

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