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Options trader foresees short-term downside in American Airlines Group Inc
The 20 stocks listed in the table below have attracted the highest total 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), where one trader is banking on a year-end stumble.
American Airlines Group Inc is up a modest 0.6% around midday, at $42.95. While the equity's options pits aren't especially busy, short-term strikes are in focus, as the stock's 30-day at-the-money implied volatility has jumped 2.2% to 41.3%.
AAL's most active strike so far is the December 41 put, where nearly all of the 2,015 contracts on the tape crossed as a multi-exchange sweep about 10 minutes into the session. Specifically, one speculator bought to open 2,000 of the out-of-the-money puts at a premium of $1.50 apiece, yielding an initial cash outlay of $300,000 (premium * number of contracts * 100 shares per contract).
In so doing, the trader is anticipating AAL will breach $39.50 (strike less premium) by the close on Friday, Dec. 19, when the back-month options expire. Gains will accrue on a move all the way down to zero, while the maximum potential loss is limited to the premium paid, should shares of American Airlines Group Inc (NASDAQ:AAL) be perched at or above $41 when December options expiration rolls around.