HomeAway generated massive gains for traders last month, but now
they apparently think that the party is over.
optionMONSTER's Heat Seeker monitoring program detected unusual
in the heavily shorted time-share company earlier this year.
, they bought the March 25 calls for $0.55, then watched them
expand to $1.45. Shortly after they
to the April 30 calls, which more than tripled from about $1 to
In yesterday's session, an investor took the opposite side of the
trade: More than 2,700 May 30 calls were sold for $2.05 against
open interest of 102 contracts. This time instead of locking in the
price where shares can bought, the trader agreed to sell them if
they go above $30 by expiration. (See our
section for more on the strategy.)
AWAY declined 3.8 percent to $30.35 yesterday. It went public for
$27 in June 2011, then fell to $20 and spent the next year bouncing
along that level. The stock has been more bullish since December,
surging more than 50 percent through late last month. The last
earnings report on Feb. 20 also beat expectations, fueling a big
jump in the share price.
Yesterday's call selling reflects a belief that further upside will
be limited over the next 1-1/2 months. The investor probably owns
shares and is using the options to hedge their position. He or she
has now effectively locked in a sale price of $32.05 if it holds
More than 4,900 AWAY options changed hands in the session, 5.5
times its daily average.