NEW YORK -- Delta Air Lines
(DAL) has retreated in the last week, but the bulls came back on Thursday.
OptionMonster's tracking systems found heavy buying in the March 35 calls, where about 19,500 contracts traded with most large blocks priced for 42 cents. Volume was nearly 20 times higher than the previous open interest in the strike, showing that new positions were established.
These calls lock in the price where the stock can be purchased through mid-March no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $35.
The airline carrier has pulled back sharply since reporting earnings last week but rose 2.21% to $30.58 on Thursday. DAL also attracted buying in its February calls early this month, so this is clearly a name where the bulls have been active.
Total option volume in Delta Thursday was more than twice its daily average for the last month. Overall calls outnumbered puts by a bullish 8-to-1 ratio.
Yamamoto has no positions in DAL.