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Unusual put spread in Delta Air Lines

Chris McKhann (chris.mckhann@optionmonster.com)

An unusual put strategy is leading today's option activity in Delta Air Lines as shares slip lower.

optionMONSTER systems show that a diagonal spread makes up most of the volume of the morning in DAL. A trader bought 2,300 July 18 puts for $1.05 in volume well above the previous open interest of 74 contracts. At the same time, he or she sold 2,300 September 16 puts for $0.92 well below against open interest of 4,765 at that strike.

This could be a roll, which would suggest concern about a greater selloff in the near term, as it would mean that the trader is moving the position to closer in time. But it seems more likely that this is a new put spread by a trader who is looking to play those July 18 puts and wants to use the sale of the longer-term options to subsidize the cost. (See our Education section)

DAL is down 1.54 percent to $17.91 this morning. Shares were above $19 last week, double their price from the September lows. 

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