NEW YORK -- Option volume was off the charts in AAR (AIR) on Monday, with traders looking for multi-year highs by early 2014.
OptionMonster's trade scanners showed heavy buying in the February 35 calls, with initial blocks fetching 55 cents and large trades later going for up to 89 cents. Almost 4,200 contracts traded against previous open interest of just 12 contracts, so new money was clearly put to work.
These calls lock in the price where shares can be purchased in the diversified provider of products and services to the worldwide commercial and defense aviation markets. Traders use them to cheaply position for a rally or to leverage otherwise small moves.
AAR rose 1.09% to $30.52 on Monday and has been progressing nicely higher despite weak earnings. The stock touched $30.81 at one point Monday, its highest level in more than two years.
Total option volume was 40 times greater than average in the session, with calls outnumbering puts by more than 600 to 1.
Russell has no positions in AIR.