What to make of the 124,000 March 17.50 calls at DAL and 100,000+ 17.50 NWA calls? does this mean merger, or am I reading this wrong? any insight from the experts would be very much appreciated. Thank you.
not an expert but that is a lot of OI....merger talk has been buzzing for some time. DAL and NWA would be a pretty good fit. However if memory serves CAL and NWA entered an agreement not just to code-share but more of a joint venture (at least when I was working with them up to 2001) Their agreement "may" be up this year or next so they (NWA) would be more in a position to merge with DAL....otherwise a more natural fit is NWA-CAL
From a post on 11/26 on theoptionsinsider.com : Northwest Airlines (NWA) Airlines heated up last week and the sector continues to trade very actively today. NWA leads the single stock space with more than 180,000 contracts trading, or 19 times recent average volume in the form of a massive spread on the PHLX. The stock is currently near $17.55. In this trade, a large institutional customer sold 65,000 December 15 calls & 22000 December 20 calls. At the same time, the customer purchased 35,000 March 17.5 calls for a net debit of just over $10 million. Existing open interest suggests that this client is "rolling" the long-call positions in December to March, extending a very bullish position on the stock for several months. Trade history shows that the 65,000 December 15 strike calls were bought in August for $4.50. At the time, the stock was at $18.14 and implied volatility was coming off a multi-year high. Todayâs trading price of $3.20 shows that the initiator is willing to commit additional capital to this bullish view.