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Large investor rides with Expedia

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Expedia is seeing bullish option activity ahead of its earnings report next week.

A trader sold 2,000 August 85 calls for the bid price of $2.60 and bought 3,000 September 90 calls for the ask price of $1.90 yesterday, according to optionMONSTER's Heat Seeker tracking system. Volume was below previous open interest in the nearer-term contracts but above it in the later strike, indicating that a long position was rolled forward.

The trader is closing the nearer-term calls and opening a larger position one month later at a strike that is $5 higher. The new long calls are looking for a rally by mid-September but will expire worthless if shares remain below $90. (See our Education section)

EXPE rose 0.83 percent yesterday to close at $80.92. The online travel agency pulled back after reaching an all-time high of $82.36 on July 3 but has bounced off its 30-day moving average in recent days. The company is scheduled to announce second-quarter results on July 31.

Yesterday's total option volume in Expedia reached 12,000 contracts, 6 times its daily average for the last month. Overall calls outpaced puts by 2 to 1.

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