Airliners are seeing massive call option action today with Continental (NYSE: CAL) trading more than 7,700 October $18 calls with shares at $16.80; Delta (NYSE: DAL) trading more than 13,200 October $10 calls with shares at $9.35; and US Air (NYSE: LCC) trading more than 10,600 October $6 calls with shares at $5.18. Furthermore, JetBlue (NASDAQ: JBLU) October $7 calls are trading 10,900 October $7 calls with shares at $6.50. The trades have seen some very large blocks hit, and it may be a “shotgun approach” looking for consolidation in the airline industry, or just a bullish view as oil breaks below $70 a barrel and the airline companies seem to have seen the worst. Most of the airline stocks are at 52 week highs after jet fuel recently hit long time lows, which will improve margins plus the added benefit of a rebounding economy generating more air traffic and better fill rates on planes.
Joe Kunkle, OptionsHawk.com
11:00 AM EST
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