Option Bull Travels First-Class With Expedia

David Russell|Writer, OptionMonster
Friday, 27 Apr 2012 | 6:41 AM ET


Source: expedia.com

reported strong results yesterday afternoon, and one investor is positioned for some major profits.

OptionMonster’s tracking systems detected the purchase of 10,000 January 35 callsfor $2.55 and $2.60 about halfway through the session. Those contracts lock in the price investors must pay to buy the stock, so they can deliver major leverage if the shares move in the right direction.


So far, so good: The online travel company reported first-quarter profit of $0.22 on revenue of $816.5 million. Analysts had expected just $0.15 and $790.91 million, respectively.

Expedia shares finished yesterday’s session up 0.96 percent to $32.63, but was quoted at $38.74 in after-hours trading following the earnings report. If the gains hold, those January calls will probably more than double to somewhere between $5 and $6.

The stock had rallied late last year and early this year, but then pulled back and found support at its 100-day moving average. It’s now poised to test its previous all-time highs from early 2008.

Overall option volume was 21 times greater than average in the session, with calls outnumbering putsby more than 12 to 1.

—Russell has no positions in EXPE.

Additional News: Expedia Jumps 12% Post Earnings

Additional Views: Online Travel Companies Growing Faster Than Hotels: Analyst


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David Russellis a reporter and writer forOptionMonster .



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