NEW YORK -- Call buyers have been targeting Delta Air Lines
(DAL) for months, and Tuesday they came back for more.
More than 13,500 April 36 calls traded Tuesday as premiums rose from 71 cents to $1.12, according to OptionMonster's tracking systems. Open interest in the strike was just 198 contracts before the session began, clearly showing that new positions were established.
These calls lock in the price where the stock can be purchased through mid-April no matter how far it might climb. They could be sold earlier at a profit if premiums rise with more rallies before then, but the contracts will expire worthless if shares remain below $36.
Delta shares rose 5.71% Tuesday to close at $34.45. The airline carrier has seen its share price more than double in the last year while drawing upside option trades repeatedly in 2014, most recently in April 33 call buying last week.
OptionMonster cofounder Pete Najarian cited the bullish trend in Delta on CNBC's "Fast Money" Tuesday.
Total option volume in the name topped 54,000 contracts Tuesday, more than quadruple its daily average for the last month. Overall calls outpaced puts by 4.5 to 1.
Yamamoto has no positions in DAL; Najarian owns DAL calls.