Goodyear Tire & Rubber pushed to new highs yesterday, and
the options activity was extreme.
The unusual volume hit early and hit often in the company, starting
with January 25 calls and the January 25.50 calls. The 25s were
purchased for $0.45 and 25.50s fetched $0.25. More than 4,000
contracts traded in each during the first 30 minutes of trading.
Buyers returned in the afternoon, snapping up more than 6,000
February 26s for $0.95 to $1 and almost 8,000 January 23s for $2.25
to $2.40. Such
lock in the price where a stock can be purchased, letting investors
cheaply leverage modest gains in the underlying price. (See our
In the largest transaction of the day, an investor bought 15,000
July 27 calls for $1.85 and sold 15,000 July 31s for $0.70. Known
, the strategy will leverage a $1.15 bet into a potential $4
windfall if the shares close at or above $31 on expiration.
GT rose 2.06 percent to $25.22 yesterday and is up 12 percent in
the last month. The stock almost doubled between April and
September, pulled back and has been climbing since early November.
It's now back to levels last seen in mid-2008.
Earnings will probably be released in the first half of February
based on last year's calendar, although the date hasn't yet been
Total option volume was 23 times greater than average in the
session, with calls outnumbering puts by a bullish 30-to-1 ratio.
(A version of this post appeared on
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