TD Ameritrade's Chief Strategist Sees Increased Call Options Buying On Virgin America

Speaking to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan said that the options market is pricing in a nearly 7 percent move, up or down, on Virgin America Inc VA ahead of its earnings release on Wednesday.

Kinahan mentioned that traders should understand that because a significant number of options are not traded on VA stock, the implied volatility can seem higher.

Call options on the stock have traded at approximately 3.5 times above the normal volume on Tuesday, mostly concentrated on the $40 Calls, according to Kinahan.

Commenting on the $40 Calls, Kinahan said, “It’s tough to get a read here on what to think from the options market because [trader’s bought] options that are so far out-of-the-money and so inexpensive that it could also be short covering.”

Virgin America Inc recently traded at $34.05, down 2.13 percent.

Kevin Riley and Brianna Valleskey contributed to this report.