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Bouncing JetBlue Stock Sees Surge in Call Volume

Karee Venema

Call volume is running quick on JetBlue Airways Corporation (NASDAQ:JBLU), with more than 98,250 contracts on the tape so far -- 179 times what's typically seen at this point in the session, and easily eclipsing the previous 52-week peak of 27,872 calls traded in a single session, set on May 16. By comparison, around 2,200 puts have been exchanged, still seven times the expected intraday amount.

The December 20 call is most active by a mile, with nearly 75,200 contracts traded here. The bulk of the activity has occurred as several large-sized blocks have crossed the tape, and it looks like the front-month options are being bought to open for a volume-weighted average price of $0.28.

If this is the case, breakeven for the call buyers at the close on Friday, Dec. 20, when the options expire, is $20.28 (strike plus premium paid). Profit is theoretically unlimited past this point, while losses are limited to the initial premium paid, should JBLU stay perched beneath the round-number mark through December options expiration.

At last check, JetBlue stock is up 2.9% to trade at $19.39, rebounding after yesterday's sector-related slump. Tuesday's pullback found support at the equity's rising 40-day moving average, which has helped usher the shares higher since mid-October. Plus, this trendline is currently located near $18.80, which served as a floor for JBLU in July. Year-to-date, the airline name is up 21%.

jblu stock daily price chart on dec 4