Can someone explain to me what is going on in this situation: extreme call volume in the airlines today, specifically dal, nwa, amr, and uaua. all of the stocks are doing huge volume, with the price hanging in right around flat for the day. what is the play there? thanks
Maybe buy them. That's what Jimmy Rogers thinks. I saw an interview recently where he said he's buying airlines. The interviewer was stunned. She pointed out that many are going out of business and everyone's bearish on them. He laughed and said yes, that's exactly why he's buying them. Less competition, and excessive bearish sentiment. He pointed out that if an airline orders a plane today they have to wait over a year for delivery.
Hmm I do think that if you are going to catch a big move, people are going to tell you you're crazy, bc you have to go against the flow...its a side affect of having a new and good idea, its not the CAUSE. Just because people tell you you are crazy, doesnt mean you are right.
Looks like rolling and adjustments in NWA, UAUA, DAL. How'd you like to be the broker handling those trades, ching ching http://whatstrading.com/2008/06/26/ual-corporation-uaua-556-330/ http://whatstrading.com/2008/06/26/delta-air-lines-inc-dal-546-284/
Rolling means closing out an existing position and opening a new one in a different strike and/or month. For example, you hold a long 30 call expiring in 4 days, and you want to maintain your position in a long call at the same strike. So you roll your expiring 30 call into a 30 call in the next month. You can trade it as a spread, selling the expiring call and buying the next month's call, which would constitute a calendar spread. You can also roll to a higher/lower strike, or both different strike and month.