One investor apparently believes that the monster run might be
over for U.S. Airways.
optionMONSTER's Depth Charge monitoring system detected the
purchase of 3,500 January 20 puts for $2.06 and the sale of an
equal number of November 21 calls for $0.70. Volume exceeded open
interest at both strikes, indicating that both positions were
Owning puts ensures a minimum selling price for the stock, while
writing calls forces the investor to dump his or her shares if they
reach the strike price. Combining the two strategies hedges against
a pullback while also limiting future gains. It's usually known a
The unusual aspect of today's transaction is that the trader used
different expiration months, keeping downside protection in place
longer than he or she is on the hook to sell a rally. (See our
section for the myriad ways options can be combined to help you
manage positions more effectively.)
LCC is up 1.25 percent to $20.09 in afternoon trading. The stock is
up 49 percent so far this year and is testing levels last seen in
Overall option volume is slightly above average in the stock so far
today, according to the Depth Charge.
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