One investor is wagering on a historic breakout in airline giant
United Continental Holdings.
optionMONSTER's Heat Seeker monitoring program shows an investor
going all the way out to the January 2015 expiration, the
longest-dated contracts available in the name. He or she bought
10,000 calls at the 50 strike, most of which priced for $2.21. This
is a new position, as there was no open interest before the trade
give the investor the right to buy UAL shares for $50 in the next
20 months, no matter how high they might be at the end of that
period. The stock closed at $33.29 yesterday, up 1.12 percent, so
those calls are still far out of the money.
The trader is essentially looking for shares to return to the level
where UAL peaked in 2007, before the 2008 market crash sent it
spiraling below $4 in the next two years. The shares have been
working their way higher since.
The January 2015 contracts give investors the peace of mind knowing
that they won't miss a move above $50. They might not have the
capital to get long the name yet but expect more funds to be
available in the future. (See our
section for more on how options can be used to manage a wide range
of portfolio objectives.)
More than 25,000 contracts changed hands in the session, almost
quadruple the daily average. The Heat Seeker showed calls
accounting for a bullish two-thirds of the total.
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