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Wall Street newcomer Virgin America Inc is exploring higher highs today
Virgin America Inc (NASDAQ:VA) is flying high around midday, just a session after receiving a number of bullish brokerage notes. At last check, the shares were fresh off a record high of $44.39, up 6% at $43.44. Not surprisingly, options volume has swelled to six times the normal intraday rate. Also, the stock's 30-day at-the-money implied volatility has popped 6.3% to 57.8%, indicating strong demand for short-term contracts.
Digging deeper, there appears to be buy-to-open activity at the January 2015 40- and 45-strike calls -- VA's two most active options. In other words, these traders anticipate the shares will continue to press northward through the close on Friday, Jan. 16, when the front-month contracts expire. Conversely, other speculators are buying to open the January 2015 35-strike puts, banking on -- or hedging against -- a steep pullback over the next three weeks.
Speaking more generally, traders have favored long calls over puts in recent weeks. During the last 10 sessions, 1,254 Virgin America Inc (NASDAQ:VA) calls have been bought to open on the major options exchanges, compared to just five puts.