A large investor is staying the course with United Airlines.
optionMONSTER's Heat Seeker system detected the sale of 14,070 July 55 calls for $1.30 and the purchase of 14,070 August 55 calls for $2.78 yesterday. Volume was below open interest in the nearer-term contracts, indicating that long calls were rolled forward.
The trader is closing the July options, which expire in 2-1/2 weeks, and is opening a new position at the same strike one month later for a net cost of $1.48. The new long calls , which lock in the price where share can be bought, are looking for the stock to rally above $55 by expiration in mid-August. (See our Education section)
UAL rose 0.64 percent to $53.15 yesterday but is down more than 21 percent so far this year. The carrier has fallen along with other airlines on concerns of competitive pressures and volatility in the price of oil. The company's next earnings report is expected to come out in late July, after yesterday's calls have expired.
Total UAL option volume topped 50,000 yesterday, triple its daily average for the last month. Overall calls outnumbered puts by about 8.5 to 1, a reflection of the session's bullish sentiment.
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