Options Market Makes a Move on Hertz
The bears slammed Hertz along with most other stocks yesterday, but option traders see the car-rental giant driving higher by next spring.
More than 5,000 March 12 calls have been purchased, with the largest block pricing for $1.53, according to OptionMonster's tracking systems. There was no existing open interest in the strike, and those calls accounted for almost all the option activity in the name yesterday.
HTZ fell 9.02 percent yesterday to close at $10.19, near its lowest levels for the year. It had been a popular stock before the recent selloff, trending higher along with upside option activity since hitting a 52-week low of $8.36 almost a year ago.
But shares headed lower going into its quarterly report on Aug. 2, and they continued falling even though the company beat earnings expectations and raised its outlook for 2011. Hertz has been locked in a bidding war with rival Avis Budget Group in an attempt to acquire Dollar Thrifty, raising its last bid to $2.25 billion in May.
—Russell has no positions in HTZ.
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David Russell is a reporter and writer for OptionMonster.