Daily Report — November 15, 2021

Tom Gentile

Posted in Daily Report

By: Tom Gentile on November 15th, 2021 • 2 mins read

When a Stock Makes more than One List

There are times when a security makes more than one list. When that happens I try and look at what the options are and if they are for those with a short-term and long-term expiration.

What I try to gauge is if they give me a take on what the sentiment and direction for the stock might be.

The stock that is showing up on three of the Morning Report lists is American Airlines Group, Inc. (NYSE: AAL).

Is their options activity in the sector?

I do not see any other airlines stocks on other so I can’t look at this activity as an airlines industry play.

But I still offer observation on AAL.

High Option Volumes and Open Interest

Shorter-Term Options

The action on the shorter-term options showed up in the Highest Option Volume list and the Unusually High Call Option Volume list and those options are the November 26, 2021, 22.50 Calls and November 26, 2021, 21.50 Calls, respectively.

Longer-Term Options

The Highest Option Open Interest list has the LEAPs options for way out into January of 2023.

BUT… look closely those are the Put options.

The thing is the data does not include if these options are bought or sold to open.

On the one hand id those LEAPs are majority Sold to Open that is a bullish view in that the stock is anticipated higher and therefor no one will exercise those options and they will expire and the sellers of those puts keep the premium.

What is shown in the Options lists?

The assessment I have right now is in the short-term, with earnings behind this company and the fact it has options that made these two short-term lists, is there may be an anticipated bullish move possible with AAL.

The LEAPs are at the $10 strike with the stock currently at $20 and change. This may be a way for folks to sell some premium on a stock at a strike they feel is so far away that they will, by 2023 or sooner, will get cheaper so they can eventually buy the options back at lower price and profit the difference.

It will be interesting to see how things play out with these on AAL.