United Continental Holdings has had a pullback after a big rally, and one investor is looking for a rebound.
A block of 5,000 September 28 calls were purchased this morning for $1.32 against open interest of just 350 contracts. The trade accounted for more than half the volume in the airline stock so far today.
UAL is down 0.74 percent to $22.77 in afternoon trading. It climbed more than sevenfold between July 2009 and last November, but has been drifting lower since then. The shares now seem to be building support between $22 and $23, which is about the same level where they consolidated in the second half of 2010 before continuing higher.
Today's option trader apparently thinks that UAL will hold its ground and wants the right to own shares in coming months.
While overall volume in the name isn't unusual, the activity is bullish because calls outnumber puts by a bullish 9-to-1 ratio far today, according to the Heat Seeker.
- United Continental Holdings