JetBlue Airways (JBLU) Bull Sees Higher Highs Ahead

One JetBlue Airways Corporation trader rolled her long call position up and out

Nov 19, 2014 at 12:32 PM
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JetBlue Airways Corporation (NASDAQ:JBLU) is up 4.4% at $13.27 -- and earlier hit a seven-year high of $13.48 -- as traders cheer the company's plans to appease shareholders at the expense of its passengers. Specifically, JBLU said it is adding more seats to its Airbus 320, and will begin charging baggage fees. Against this backdrop, calls are crossing the tape at a rate seven times the intraday average, and are outpacing puts by a roughly 27-to-1 margin.

The majority of the day's action has centered on two options -- the January 2015 13-strike call and the March 14 call, where a collective 21,603 contracts have traded. According to Trade-Alert, the bulk of the activity occurred as several large blocks of the former were sold to close, while symmetrical blocks of the latter were simultaneously bought to open.

In other words, it appears this speculator rolled her bullish bet up and out, eyeing additional gains for JBLU through March options expiration. Delta on the March 14 call is docked at 0.47, suggesting a 47% chance JBLU will be sitting north of $14 at the close on Friday, March 20 -- a feat not accomplished since February 2007.

Today's call-skewed session just echoes the shift in sentiment JBLU has been experiencing in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 43.29 ranks in the 84th percentile of its annual range. Although, with more than one-fifth of JetBlue Airways Corporation's (NASDAQ:JBLU) float sold short, a portion of this activity could be at the hands of short sellers initiating upside hedges.


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