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Bulls Want to Fly Hawaiian

By David Russell of OptionsMonster

NEW YORK -- The parent of Hawaiian Airlines has broken above its highs from late 2009, and the bulls are piling on board.

OptionMonster's tracking systems detected unusual activity in Hawaiian Holdings' (HA) April 9 calls, with more than 7,000 purchased mostly for $0.90. Volume was far above the strike's previous open interest of just 419 contracts, showing that new positions were initiated.

More than 4,000 January 8 calls were sold around the same time for $1.20, so it appears that some of Friday's buys were a roll of a bullish long position up in strike and out in time.

Long calls lock in the price where shares can be bought, letting investors position for gains by using much less capital than purchasing shares directly. The options can deliver significant leverage in a rally but will expire worthless if the stock falls too far.

Hawaiian's shares were down fractionally before the trades hit but then turned around and closed higher by 1.71% to $9.50. The stock has appreciated 55% in the last six months.

Short interest was 19% of the float at the end of last month, which could provide some additional jet fuel as well for the stock.

Overall option volume was more than 100 times greater than average in the session, with calls accounting for a bullish 96% of the total.

-- Written by David Russell

Russell has no positions in HA.

Stock quotes in this article: HA 
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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