Trader hopes to ride Gol Linhas higher
Gol Linhas Aereas Inteligentes attracted a bullish option position yesterday as the Latin American airline operator rose sharply.
optionMONSTER's Heat Seeker system detected the purchase of 2,000 May 7.50 calls in one print for $0.25. This is a new position, as its volume was above the strike's open interest of 1,581 contracts before the session began.
GOL rose 9.81 percent to $6.38 yesterday, closing above its 100-day moving average for the first time in a month. Shares of the Brazilian company spiked higher after reports that regulators would cut the domestic tax on airline fuel by more than half, to 12 percent from 25 percent.
Yesterday's long calls , which lock in the price where traders can buy the stock no matter how high it might rise, are betting that GOL will rally above $7.75 by mid-May. If shares remain below the $7.50 strike price, however, the options will expire worthless. (See our Education section)
The company will hold its annual shareholders meeting on April 30 and is scheduled to release its first-quarter earnings results on May 13.
Total option volume in the name was 3,236 contracts, double its daily average in the last month. Only 152 puts traded in the session, a reflection of the day's bullish sentiment.
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