Traders turning cautious on airlines
Airlines have been soaring all year, but traders turned cautious at the end of last week.
Delta Air Lines saw about 8,700 July 15 puts purchased in less than 1 minute on Friday morning, led by a single print of 7,958 that went for $0.25, according to optionMONSTER's Depth Charge system. This was clearly fresh buying, as the strike's open interest was a mere 91 contracts before the session began.
Less than an hour earlier, the Depth Charge detected heavy July put buying in United Continental as well. UAL ended Friday down 0.55 percent to $32.46. (See related story )
DAL fell 0.5 percent to close the week at $18.01. The airline carrier spiked to $19.43 on May 15, its highest intraday price since December 2007, but was range-bound for most of the month between $18 and $19.
The put buying in both names, which locks in the price where traders can sell shares, was not tied to any stock trading detected by our systems on Friday. They could either be hedges on existing long positions or outright bearish bets. (See our Education section)
Delta saw nearly 22,000 options trade overall on Friday, more than double its daily average in the last month, as puts outpaced its calls by more than 3 to 1. United's total volume topped 11,800 contracts, also about double its average, with calls outnumbering puts by more than 10 to 1.
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