Expeditors International of Washington has been trying to push
higher, and investors remain bullish on the name.
optionMONSTER's Heat Seeker tracking program detected the purchase
of about 5,400 January 40 calls, most of which priced for $0.45 to
$0.65. Volume was more than twice previous open interest at the
strike, indicating that new positions were opened.
Those buyers have locked in a $40 entry price on the shares over
the next three weeks, no matter how high the stock price goes. That
will result in
some nice leverage
if the logistics and shipping company continues to appreciate in
For instance, EXPD fell marginally to $39.03 on Friday. If it
climbs just 10 percent to $42.93 by expiration, those calls will
roughly quintuple. The advantage of the strategy is that the calls
are much cheaper than the stock, which reduces the amount of money
the investor can lose if it drops. (See our
section for more on how options can be used to manage risk.)
EXPD has mostly been weak for the last two years, having lost about
40 percent of its value between December 2010 and October 2012. But
then Goldman Sachs upgraded the company to "conviction buy" from
"sell," anticipating an improved air-freight market. The move came
shortly after Sterne Agee made a similar recommendation.
Total option volume in EXPD was 9 times greater than average in the
session, according to the Heat Seeker. Calls outnumbered puts by 28