Options Radar: American Airlines, Halliburton Company, and FedEx

Reviewing notable options activity on American Airlines Group Inc, Halliburton Company, and FedEx Corporation

by Andrea Kramer

Published on Nov 28, 2014 at 12:14 PM
Updated on Apr 20, 2015 at 5:32 PM

In the wake of crude oil's plummet, airlines are flying high -- including American Airlines Group Inc (NASDAQ:AAL) -- while energy stocks like Halliburton Company (NYSE:HAL) are in the red. Meanwhile, package delivery firm FedEx Corporation (NYSE:FDX) is garnering attention ahead of the expected December surge. In the options pits, here's a look at how speculators have been placing their bets on AAL, HAL, and FDX.

  • American Airlines Group Inc (NASDAQ:AAL) is among the equities benefiting from oil's decline, with the shares up 8.5% at $48.78. In fact, AAL earlier tagged a record high of $49.45, and is set to end November roughly 18% higher.. Options players are gambling on even higher highs for the stock in the next couple of months, with intraday call volume running at three times the typical pace, and nearly tripling put volume so far. The equity's 30-day at-the-money (ATM) implied volatility (IV) has popped 7.7%, reflecting a growing demand for short-term contracts, and it looks like bulls are buying to open the January 2015 50-strike call -- hands-down the most popular option on the day. By purchasing the calls to open, the buyers expect AAL to surmount the mid-century mark by the close on Friday, Jan. 16, when the back-month options expire.

  • Halliburton Company (NYSE:HAL), on the other hand, is suffering from an energy-sector swoon, down 10.1% at $42.56. Earlier in the session, the security touched a new annual low of $41.87, and landed on the short-sale restricted list. Nevertheless, HAL calls are once again the options of choice; roughly 74,000 contracts have traded -- four times the intraday norm, and twice the number of puts exchanged. The security's 30-day ATM IV has skyrocketed 23.7% to 40.3%, with bullish holdouts betting on a short-term rebound by buying to open the December 42.50 call. For the month, HAL is on pace for a 22.8% deficit.

  • Finally, FedEx Corporation (NYSE:FDX) is 2% higher at $178.54, and tagged an all-time peak of $179.79 earlier, as early data indicates a strong holiday season for delivery giants. In addition, traders are celebrating news that Louisville-based FDX workers opted against unionizing. Against this backdrop, FDX calls are running at five times the average intraday clip, with potential buy-to-open activity detected at the December 175 call -- the most active option thus far. By purchasing the calls to open, the buyers expect FDX to continue its rally north of $175 through the next few weeks, which encompasses the firm's fiscal-second quarter earnings release the morning of Wednesday, Dec. 17. Over the past eight quarters, FDX has averaged a single-session post-earnings gain of 1.3%, and rallied 3.3% the day after its last earnings report. In November, the stock has added 6.8%.

A Schaeffer's exclusive


Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Stocks Eye Notable Weekly Gains on 3-Day Surge
Stocks are eyeing big weekly gains
WW Stock Brushes Off Bull Note
Morgan Stanley upgraded the Weight Watchers parent to "overweight" from "equal weight"
IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.