Bulls look to ride Hawaiian Airlines

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The bulls want to keep flying with airline operator Hawaiian Holdings.

On Dec. 27 , optionMONSTER's Heat Seeker monitoring system detected the purchase of about 5,000 April 9 calls for $0.90 as investors looked for upside in the share price. They guessed right, because HA has been climbing since the paper hit and those contracts have inflated to $1.50.

The name is active again today. This time a trader is unloading the original 5,000 April 9s and buying 7,000 of the February 10 calls, most of which priced for $0.70.

Making the adjustment let him or her recover $260,000 of their capital at risk. It also increased the net delta to 420,000 from 390,000, meaning that the investor stands to profit even more from a rally with the new long calls . In return for the cash back and the increased leverage, the trader surrendered two months of exposure. (See our Education section for more on managing positions with options.)

HA is up 1.68 percent to $10.30 in afternoon trading and has almost doubled since last spring. Shares of the company, which the parent of Hawaiian Airlines, are now pausing below their previous all-time highs from 2008. Last year's calendar suggests the next earnings report will occur late this month, so today's trader could be expecting a breakout when the quarterly numbers are released.

Total option volume is 10 times greater than average in the name so far today, according to the Heat Seeker. Calls outnumber puts by more than 300 to 1.

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

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