Atlas Air trader is keeping hopes aloft

By David Russell,

Shutterstock photo

Atlas Air Worldwide has been struggling, but one investor isn't giving up hope.

The company, which leases planes to airlines and other customers, gapped lower in February after earnings and revenue missed expectations. However, management predicted conditions would improve significantly in the rest of 2012.

AAWW has been fluctuating between about $44 and $50. On Friday it closed down 2.70 percent to $45.41.

A surge of put activity appeared on our tracking systems about halfway through the session. A block of 1,493 May 47.50 puts was sold for $3.30 and an equal number of April 47.50 puts were bought for $2.25. Volume was below open interest in April, indicating that a short position was rolled from one contract to the other.

It appears the investor had previously sold the April puts in hopes that the stock would remain above $47.50. But with the stock below that price, he or she needed to adjust the position to avoid being forced to buy shares. (See our Education section)

The trader now has another month for the stock to rebound, and collected an additional credit of $1.05.

Overall option volume in AAWW was 38 times greater than average in the session.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing Options
Referenced Stocks: AAWW

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