Bulls looking for breakout in AAR

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Option volume was off the charts in AAR yesterday, with traders looking for multi-year highs by early 2014.

optionMONSTER's Heat Seeker system showed heavy buying in the February 35 calls, with initial blocks fetching $0.55 and large trades later going for up to $0.89. Almost 4,200 contracts traded against previous open interest of just 12 contracts, so new money was clearly put to work.

These long calls lock in the price where shares can be purchased in the diversified provider of products and services to the worldwide commercial and defense aviation markets. Traders use them to cheaply position for a rally or to leverage otherwise small moves. (See our Education section)

AIR rose 1.09 percent to $30.52 yesterday and has been progressing nicely higher despite weak earnings. The stock touched $30.81 at one point yesterday, its highest level in more than two years.

Total option volume was 40 times greater than average in the session, with calls outnumbering puts by more than 600 to 1.

(A version of this post appeared on InsideOptions Pro yesterday.)



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

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


This article appears in: Investing , Options

Referenced Stocks: AIR

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