American Airlines Group Inc (AAL) Bears Shrug Off Record High

American Airlines Group Inc has advanced 72% since mid-October


Published on Dec 1, 2014 at 10:43 AM
Updated on Apr 20, 2015 at 5:32 PM

American Airlines Group Inc (NASDAQ:AAL) hit another fresh record high of $49.47 out of the gate, but was last seen 0.5% lower at $48.27. Meanwhile, options traders are busy, with overall volume roughly doubling the expected intraday amount. Also, the stock's 30-day at-the-money implied volatility is 2.3% higher at 38%, suggesting strong demand for short-term strikes.

Digging deeper, several options in the weekly 12/5 series are being targeted this morning. Receiving notable attention is the weekly 12/5 48-strike put, where close to 1,500 contracts are on the tape. With the majority crossing at the ask price and volume outstripping open interest, it seems safe to assume new bearish bets are being purchased. In other words, these traders anticipate AAL will drop below the strike by this Friday's close, when the contract expires.

Meanwhile, another group of option players is using calls to place skeptical bets. Specifically, it looks like the weekly 12/5 49 strike is being sold to open, as the traders expect the $49 level to contain AAL shares through week's end.

Taking a step back, American Airlines Group Inc (NASDAQ:AAL) has mounted an impressive advance of more than 91% in 2014. In fact, since touching a near-term low of $28.10 in mid-October, the stock has rallied 72%. On the fundamental front, an AAL flight was evacuated in New York yesterday, following a false bomb threat.

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