This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Goodyear Sees Huge Upside Bets

Stocks in this article: GT

By David Russell of OptionMonster
 
NEW YORK -- Goodyear Tire & Rubber GT pushed to new highs Thursday, and the options activity was extreme.
 
The unusual volume hit early and hit often in the company, starting with January 25 calls and the January 25.50 calls. OptionMonster's tracking systems show that the 25s were purchased for 45 cents and the 25.50s fetched 25 cents. More than 4,000 contracts traded in each during the first 30 minutes of trading.
 
Buyers returned in the afternoon, snapping up more than 6,000 February 26s for 95 cents to $1 and almost 8,000 January 23s for $2.25 to $2.40. Such long calls lock in the price where a stock can be purchased, letting investors cheaply leverage modest gains in the underlying price.
 
In the largest transaction of the day, an investor bought 15,000 July 27 calls for $1.85 and sold 15,000 July 31s for 70 cents. Known as a vertical call spread, the strategy will leverage a $1.15 bet into a potential $4 windfall if the shares close at or above $31 on expiration.
 
Goodyear shares rose 2.06% to $25.22 Thursday and are up 12% in the last month. The stock almost doubled between April and September, pulled back and has been climbing since early November. It's now back to levels last seen in mid-2008.
 
Earnings will probably be released in the first half of February based on last year's calendar, although the date hasn't yet been announced.
 
Total option volume was 23 times greater than average in the session, with calls outnumbering puts by a bullish 30-to-1 ratio.
 
Russell has no positions in GT.

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,162.25 +187.94 1.11%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,568.3010 +19.0750 0.42%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters