We have a massive slate of earnings on deck next week in everything from more banks/financial stocks to airlines to big oil to health care to telecomm…
You name it, we’ll probably see some of it next week — which is also shortened by the MLK Day holiday on Monday, when markets are closed.
Check this out…
We are cooking gas Tuesday with Netflix (NFLX) and others…
We probably won’t trade NFLX straight up — maybe with some Warped Options? — because it’s such an expensive stock, but something interesting caught our attention in regard to United (UAL), which also reports Tuesday…
We’ve seen bearish bets in airline stocks almost across the board this morning with the market up strong. First, let’s be clear that puts are often hedges, downside protection against a large, long position.
United has been one of the strongest stocks in the markets over the past three months or so, up 50%.
So it’s not super surprising that we’d see some insurance hedging in case the stock takes a dive on earnings. People often buy puts to hedge against long stock positions that may be up a bunch.
But here’s the interesting part…
Not only did we see a pretty decent-sized bet in the Jan. 24 expiration, $105 strike puts for UAL, but we also saw a huge $1.4 million short bet in Delta (DAL), and another $75k in some Southwest (LUV) puts, all very close to the money.
We also saw a bearish bet in American Airlines (AAL), which reports on Thursday, to the tune of $278k — this is quite a sizable bet for this $19 stock.
So airlines are getting shorted almost across the board today, which could mean something’s up! It’s weird to see all these shorts ahead of a long weekend, but there could be some bad news on the horizon.
There’s no way to know for sure, so as always… respect that risk!
Order Flow:
*This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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