Traders Wager On a Delta Air Lines, Inc. (DAL) Descent

Delta Air Lines, Inc. attracted short-term bears during Tuesday's turbulent session


Published on Dec 3, 2014 at 10:17 AM
Updated on Apr 20, 2015 at 5:32 PM

Delta Air Lines, Inc. (NYSE:DAL) stumbled 2.1% yesterday to close at $44.67, but remains a technical beast longer term. Potentially weighing on the stock was chatter over possible fuel-hedging losses, which overshadowed a 4.5% year-over-year increase in consolidated passenger unit revenue for November. Meanwhile, in the options pits, puts traded at triple the expected daily rate, as one group of speculators wagered on additional short-term losses for the shares.

Digging into the data, DAL's most popular strike was the December 44.50 put, where 11,830 contracts switched hands. More than three-quarters crossed at the ask price, and open interest soared overnight, making it safe to assume fresh bearish bets were initiated. This theory is confirmed by Trade-Alert. In short, yesterday's put buyers expect the stock to breach the strike by the close on Friday, Dec. 19, when front-month options expire.

Unfortunately for yesterday's option bears, Delta Air Lines, Inc. (NYSE:DAL) has rallied 1% this morning to hover near $45.10, bringing its year-to-date advance north of 64%. The move higher was sparked by a price-target hike to $60 from $50 at Evercore ISI.

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