Airliners are hitting highs today, the XAL up 6% on the day as oil breaks below $70, and option traders are active in a few names today.
Delta (NYSE:DAL) is trading 35,000 calls, 7X average, including a block 8,000 March $13 calls bought at the 80 cent offer. A lot of bullish December call positions are being rolled forward to January and March.
AMR Corp (AMR) is trading 38,000 calls, 3X average, with 70% offer side including block buys of December $8 and January $7.50 calls. UAL Corp (UAUA), where the bullish action started a few weeks ago, is seeing less action although the January $11 calls are seeing a few blocks bought offer side.
Continental (NYSE:CAL) is trading 20,000 calls, 4X average, with 65% offer side including large block buyers in January $20 calls with shares at $17.66. The Airline Index (XAL) officially broke a downtrend in August at $20, but now is really taking flight.
The Regional Airliners are seeing less activity today but Alaska Air (NYSE:ALK) has a great breakout on the chart, and SkyWest (NASDAQ:SKYW) may be the best value. Southwest (NYSE:LUV) is another great value that is trading 3X average call volume with bullish buying in January $11 calls.
A lot of money is flowing into this under-invested group that was once forgotten, and the "smart money" is pointing to a continued rally in the airline stocks.
Disclosure: Disclosure: No Current Position