A large trade is looking for Goodyear Tire & Rubber to keep
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 10,000 July 28 calls for $1.85 and the sale of an equal
number of April 26 calls for $1.85. Volume was below previous open
interest in the nearer-dated contracts, which indicates that an
existing position was closed and moved forward, keeping the
investor in the trade for another three months.
fix the price where a stock can be purchased, letting investors
cheaply position for a rally with potentially significant leverage
and less capital at risk. Traders often buy the options instead of
shares, then rotate capital from one option contract to another as
Today's adjustment cost nothing while providing an additional three
months for the tire maker to rally. The move also
reduced the position's delta
, dulling the pain of a near-term pullback. (See our
GT is down 0.87 percent to $27.46 in afternoon trading but is up 15
percent so far this year. The company has consistently beaten
earnings estimates on strong margins and is now back to its highest
levels since early 2008.
Total option volume in the name is quadruple its daily average,
with calls outnumbering puts by more than 60 to 1.
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