Hertz trader bets on limited upside

Mike Yamamoto (mike.yamamoto@optionmonster.com)
December 30, 2013

A large investor apparently believes that gains in Hertz will be limited in the next six weeks.

optionMONSTER's tracking systems detected the sale of 2,500 February 26 calls for the bid price of $1.15 in volume well above the strike's previous open interest of 135 contracts, clearly showing that this is a new position. About a minute later, 250,000 HTZ shares were bought for $25.90.

The combination of the two trades creates a covered-call position , with the investor purchasing the stock but selling calls against it to immediate collect some income through the option premium. The overall strategy is bullish but sees limited upside through mid-February. (See our Education section)

HTZ is up 0.76 percent to $25.94 this morning. Shares of the car-rental giant rose steadily after bouncing at the $21 level in early November but appear to have hit resistance around $26 in the last week.

Total option volume is already about 33 percent higher than its full-session average for the last month.

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