United Continental has broken out to new highs, and the bulls are betting that it will continue to fly.
optionMONSTER's Heat Seeker monitoring program detected the purchase of about 10,000 January 57.50 calls yesterday, most of which priced for $3.20. Volume was more than quadruple the previous open interest in the strike, which indicates that new money was put to work.
These long calls lock in the price where investors can buy shares in the Chicago-based airline operator, letting them position for a rally while paying only the premium of the options. That can result in significant leverage if the stock continues to run and reduce their risk if it drops. (See our Education section)
UAL rose 1.71 percent to $55.21 yesterday and is back above its old peaks from 2007. The stock is up 28 percent since the market bottomed last month, despite getting knocked briefly lower by a soft revenue forecast on Oct. 23.
Airlines remain one of the best long-term groups , according to our researchLAB market-analysis tool.
Total option volume in United was triple average amounts in yesterday's session, with overall calls outnumbering puts by more than 3 to 1.
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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.
