Navistar has been skidding lower for months, but one investor
thinks the truck maker is ready to get back on the road.
optionMONSTER's Heat Seeker monitoring system detected the purchase
of about 2,500 September 22 calls for an average premium of $0.79.
Roughly the same number of September 24 calls were sold for $0.30.
Volume exceeded open interest at both, indicating that new
positions were opened.
The trade cost $0.49 and will earn a profit of more than 300
percent if the shares close at or above $24 on expiration. It's
known as a bullish call spread because it leverages a move between
NAV is up 2.85 percent to $20.56 this afternoon but came into the
session down by half in the preceding six months. Earnings have
been weak and management has been scrambling to comply with new
emission requirements as fines mount at the Environmental
The stock is now attempting to hold its lowest levels since the
start of 2009. Some chart watchers could be expecting a bounce but
may also be worried about even lower prices if current support
gives way. Call spreads are a common way to play such a situation
because they limit risk. (See our Education Section for other
Overall option volume is almost twice the daily average so far
today, with calls outnumbering puts by 5 to 1.
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.
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