jetflier
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Monday's Options Report: NWA, DAL, UAUA, Grace, ING, NG, GOLD
posted on: November 26, 2007 | about stocks: NWA / DAL / UAUA / GRA / ING / GOLD / NG
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(NWA) - Options activity in Northwest Airlines quickly heated up to 14 times the average volume this morning, with calls trading at their fastest groundspeed in months, making the 180,000 contracts in circulation the day’s absolute most liquid option family by sheer volume. The trading here is characterized by what appears to be bull call spread activity in the December contract between strikes of 15 and 20, followed by buying in the March 17.50 calls on a volume of 90,000 lots. The action follows a 1.8% decline in the share price to $17.49. Implied volatility at 78% suggests option traders anticipating about 14% more variability in share price going forward than it Northwest has shown historically.
(DAL) - An article in the Chicago Tribune on the cusp of last week’s Thanksgiving peak-travel period reported that Delta Airlines pilots are vowing to fight tooth and nail any forced merger between Delta and United Airlines parent company UAL. Some weeks back, Pardus Capital Management, a Delta minority shareholder, imploring the company to pursue a consolidation with Delta, and its management responded if not in the glaring affirmative, then certainly with a wink and a nudge, announcing that an exploratory committee had been established in the interest of seeking partnerships to allay the effects of higher fuel costs and tighter competition. Option action in Delta Airlines this morning suggests option traders deferring their expectation of deal making from the December calls, where lots at the 15 strike were sold, to the March contract, where contracts at the 17.50 strike were bought. A look at the ratio of calls to puts in Delta shows bullish calls outnumbering bearish puts by a staggering 5 to 1, which on the surface indicates a high level of confidence among shareholders that the company is on a course to do right by its market and shareholders. Call volume in Delta is at its highest level since the first merger mumblings emerged earlier in November, and again, option implied volatility at 82% shows a sustained and substantial gap above the 67% historic reading.
(UAUA) - The March contract in United Airlines’ parent company UAL was again the magnet for shareholders, with the 48,000 lots traded this morning grounded in fresh buying on scale of 20,000 contracts at each of the 35 and 40 strikes in the March calls. A look at the latter strike shows buyers paying around $6.50 to lock in a $40 price per United share in the month of March. This would imply a move to $46.50, a 16% premium on today’s share price of $39.88 and within a modest $5 of its 52-week high of $51.60.
posted on: November 26, 2007 | about stocks: NWA / DAL / UAUA / GRA / ING / GOLD / NG
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(NWA) - Options activity in Northwest Airlines quickly heated up to 14 times the average volume this morning, with calls trading at their fastest groundspeed in months, making the 180,000 contracts in circulation the day’s absolute most liquid option family by sheer volume. The trading here is characterized by what appears to be bull call spread activity in the December contract between strikes of 15 and 20, followed by buying in the March 17.50 calls on a volume of 90,000 lots. The action follows a 1.8% decline in the share price to $17.49. Implied volatility at 78% suggests option traders anticipating about 14% more variability in share price going forward than it Northwest has shown historically.
(DAL) - An article in the Chicago Tribune on the cusp of last week’s Thanksgiving peak-travel period reported that Delta Airlines pilots are vowing to fight tooth and nail any forced merger between Delta and United Airlines parent company UAL. Some weeks back, Pardus Capital Management, a Delta minority shareholder, imploring the company to pursue a consolidation with Delta, and its management responded if not in the glaring affirmative, then certainly with a wink and a nudge, announcing that an exploratory committee had been established in the interest of seeking partnerships to allay the effects of higher fuel costs and tighter competition. Option action in Delta Airlines this morning suggests option traders deferring their expectation of deal making from the December calls, where lots at the 15 strike were sold, to the March contract, where contracts at the 17.50 strike were bought. A look at the ratio of calls to puts in Delta shows bullish calls outnumbering bearish puts by a staggering 5 to 1, which on the surface indicates a high level of confidence among shareholders that the company is on a course to do right by its market and shareholders. Call volume in Delta is at its highest level since the first merger mumblings emerged earlier in November, and again, option implied volatility at 82% shows a sustained and substantial gap above the 67% historic reading.
(UAUA) - The March contract in United Airlines’ parent company UAL was again the magnet for shareholders, with the 48,000 lots traded this morning grounded in fresh buying on scale of 20,000 contracts at each of the 35 and 40 strikes in the March calls. A look at the latter strike shows buyers paying around $6.50 to lock in a $40 price per United share in the month of March. This would imply a move to $46.50, a 16% premium on today’s share price of $39.88 and within a modest $5 of its 52-week high of $51.60.
