Call Spread Purchased in AMR
Parent company of American Airlines, AMR Corp (NYSE: AMR) is receiving a bull call spread this morning that suggests that the stock will break to new 52-week highs in April. Just a short while ago the April $10/12 call spread was purchased 4,655 times. The $10 calls were purchased for roughly $0.53 and the $12 calls were sold for $0.08, thus the trader paid a net debit of $0.45 for the transaction.
AMR Corp has been on a complete tear (as all airlines have been recently), breaking to new highs almost every day. The stock has retraced a bit after reaching a high of $10.50 last week, but trading suggests that the stock may be ready to push higher now. Oil prices seem to have reached an intermediate term peak and are trading in a stable though elevated range, which may fuel the airline rally.
If you are going to play the airlines, be sure to do it with call spreads as these things are super volatile though.
