By Pete Najarian of OptionMonster
NEW YORK -- Hotels are a focal point with Hilton going public, and Thursday Host Hotels & Resorts (HST) lit up our systems with upside option activity.
OptionMonster's trade scanners detected unusual volume in the December 19 and April 20 calls, with an investor rolling a long position up in price and out in time. He or she sold the 19s for 3 cents and bought the 20s for 35 cents, apparently looking for a run higher into the spring. More than 7,000 contracts traded at each strike.
These calls lock in the price where a stock can be bought, letting investors cheaply position for a move higher. That way they can manage risk and enjoy big leverage if the shares move in the right direction.
Host Hotels fell 1.44% to $17.85 on Thursday. The company is primarily engaged in the ownership and operation luxury and upscale hotels.
Total option volume in the name was 20 times greater than its daily average for the last month. Overall calls outpaced puts by a massive 16,700-to-32 ratio, a clear reflection of the session's bullish sentiment.
Najarian owns HST calls.