Markets

Bull extends position on Hertz calls

Hertz has been trending higher, and one investor is adjusting a position to reap further gains.

optionMONSTER's tracking systems detected the purchase of 2,500 September 16 calls for an average premium of $1.775. An equal number of September 19 calls was sold at the same time for $0.50.

Volume was below open interest in the lower-strike calls, suggesting that an investor closed an existing position and rolled it to the higher strike. It cost 1.275 but will give provide the right to collect an additional $3 of upside if HTZ climbs to $19 by expiration.

The car-rental stock fell 1.08 percent to $16.50 in afternoon trading and is up 32 percent in the last six months. It's been climbing on a rebound in travel, and reported better-than-expected first-quarter results on April 26. Management also raised full-year guidance.

Rolling the short position in the calls now prevented the investor from being forced to sell his or her shares at $16 in coming months. (See our Education section for more on covered calls)

Overall option volume in HTZ 5 times greater than average so far today.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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