UAUA – UAL Corporation – The Chicago-based owner and operator of United Airlines appeared on our ‘most active by options volume’ market scanner late in the trading session. UAUA’s shares increased nearly 6.00% in the first half of the trading day to secure a new 52-week high of $24.28. The airline operator’s shares are currently up 4.40% at $23.92 with 15 minutes remaining before the closing bell. One optimistic options strategist appears to have initiated a bullish risk reversal, selling 4,750 puts at the September $17 strike for a premium of $0.78 each, and buying the same number of calls at the higher September $27 strike for a premium of $1.63 apiece. The net cost of the transaction amounts to $0.85 per contract and prepares the responsible party to profit if shares of the underlying stock jump 14.7% over the new high of $24.28 to surpass the effective breakeven point to the upside at $27.85 by September expiration.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
Interactive Brokers: Interactive Brokers offers direct market access to around 80 electronic global markets from a single account. Successful traders and investors understand that superior technology and lower trading costs can result in greater returns. For 32 years we have been building direct access trading technology that delivers real advantages to professionals worldwide. With consolidated equity capital of US $4.4 billion, IB and its affiliates exceed 1,000,000 trades per day. In addition, our prudent and conservative risk policies make Interactive Brokers a safe haven for your money. Discover some of the reasons why IB, the largest independent US broker/dealer, is the professional traders' and investors' choice.
Visit: Interactive Brokers