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Investor extends stay in Host Hotels

Pete Najarian (ask-pete@optionmonster.com)

Hotels are a focal point with Hilton going public, and yesterday Host Hotels & Resorts lit up our systems with upside option activity.

optionMONSTER's trade scanners detected unusual volume in the December 19 and April 20 calls, with an investor rolling a long position up in price and out in time. He or she sold the 19s for $0.03 and bought the 20s for $0.35, apparently looking for a run higher into the spring. More than 7,000 contracts traded at each strike.

Long calls lock in the price where a stock can be bought, letting investors cheaply position for a move higher. That way they can manage risk and enjoy big leverage if the shares move in the right direction. (See our Education section)

HST fell 1.44 percent to $17.85 yesterday. The company is primarily engaged in the ownership and operation luxury and upscale hotels.

Total option volume in the name was 20 times greater than its daily average for the last month. Overall calls outpaced puts by a massive 16,700-to-32 ratio, a clear reflection of the session's bullish sentiment.

Disclosure: I own HST calls.

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

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