UAL Attracts Bullish Move

CHICAGO ( TheStreet) -- UAL Corp ( UAUA) did not announce any news Tuesday, but at least one option investor has expressed interest in a longer-dated call series on a bet that shares of the airline name could rally significantly.

The January 2011 30 calls have traded more than 9,200 times so far today versus current open interest of 423 contracts, indicating investors most likely traded these options to open. The majority of these calls traded at or near the ask price of $1.15 per contract, likely meaning they were initiated on the buy side.

Bullish investors who bought these calls need UAUA shares to close higher than $31.15 to make money, unless the calls appreciate along with a rally in the stock and investors could choose to sell back the options to take profits. Implied volatility of the January 2011 30 calls is 58%, compared to a 30-day historical volatility of roughly 71%.

UAUA reached a 52-week high of $18.49 during Monday's session before selling off. Today, the stock is currently trading down 12 cents to $17.91 on the day today. UAUA stock must rally at least 73% at January expiration for today's long-call trade to turn profits.

-- Written by Jud Pyle in Chicago

At the time of publication, Pyle did not have a position in the stock mentioned. Jud Pyle, CFA, is the chief investment strategist for Options News Network. Pyle started his career in finance in 1994 as a derivative analyst with SBC Warburg. After four years with Warburg, Pyle joined PEAK6 Investments, L.P., in 1998 as an equity options trader and as chief risk officer. A native of Minneapolis, Pyle received his bachelor's degree in economics and history from Colgate University in 1994. As a trader, Pyle traded on average over 5,000 contracts per day, and over 1.2 million contracts per year. He also built the stock group for all PEAK6 Investments, L.P. hedging, which currently trades on average over 5 million shares per day, and over 1 billion shares per year. Further, from 2004-06, he managed the trading and risk management for PEAK6 Investments L.P.'s lead market-maker operation on the former PCX exchange, which traded more than 10,000 contracts per day. Pyle is the "Mad About Options" resident expert. He is also a regular contributor to "Options Physics."

More from Options

Rent-A-Center Bulls Quadruple Their Money

Rent-A-Center Bulls Quadruple Their Money

Let the Najarian Brothers Crash-Proof Your Portfolio

Let the Najarian Brothers Crash-Proof Your Portfolio

Let the Najarian Brothers Help You Generate Income With Options

Let the Najarian Brothers Help You Generate Income With Options

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO

All Investors Can Trade Options, Just Ask the Najarian Brothers WATCH VIDEO

Learn Options Trading from the Najarian Brothers, the Best in the Business

Learn Options Trading from the Najarian Brothers, the Best in the Business