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Calls see new heights for JetBlue

Mike Yamamoto (mike.yamamoto@optionmonster.com)

JetBlue Airways flew to a six-year high yesterday, and traders are apparently looking for even more gains after its earnings report next week.

optionMONSTER's Heat Seeker system detected the purchase of 5,000 November 8 calls in two prints for $0.10 and $0.15 yesterday. This is clearly a new position, as open interest in the strike was just 332 contracts before the trade appeared.

These long calls lock in the price where the stock can be purchased through mid-November no matter how far it might climb. But they will end up worthless if shares remain below $8 through expiration three weeks from today. (See our Education section)

JBLU rose 2.84 percent to $7.60 yesterday, its highest close since October 2007. The stock had been trapped between $6 and $7 since April but broke out of that range a week ago.

The company is scheduled to release third-quarter results on Tuesday morning.

Total option volume in JBLU topped 9,000 yesterday, more than 5 times its daily average for the last month. Only 156 of those contracts were puts, a reflection of the session's bullish sentiment.

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