Bulls want to fly Hawaiian Airlines

David Russell (david.russell@optionmonster.com)
December 30, 2013

The parent company of Hawaiian Airlines has broken above its highs from late 2009, and the bulls are piling on board.

optionMONSTER's Heat Seeker system detected unusual activity Hawaiian Holdings' April 9 calls, with more than 7,000 purchased mostly for $0.90. Volume was far above the strike's previous open interest of just 419 contracts, showing that new positions were initiated.

More than 4,000 January 8 calls were sold around the same time for $1.20, so it appears that some of Friday's buys were a roll of a bullish long position up in strike and out in time.

Long calls lock in the price where shares can be bought, letting investors position for gains by using much less capital than purchasing shares directly. The options can deliver significant leverage in a rally but will expire worthless if the stock falls too far. (See our Education section)

HA was down fractionally before the trades hit but then turned around and closed higher by 1.71 percent to $9.50. It's appreciated 55 percent in the last six months and was selected by optionMONSTER co-founder Jon "DRJ" Najarian as his final trade on CNBC's "Halftime Report" on Friday.

Short interest was 19 percent of the float at the end of last month, which could provide some additional jet fuel as well for the stock.

Overall option volume was more than 100 times greater than average in the session, with calls accounting for a bullish 96 percent of the total.

(A version of this post appeared on InsideOptions Pro yesterday.)

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