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I can quadruple my money by betting on this airline: Trader

Airline stocks have been grounded this summer, but one trader is looking to quadruple his money on a stock he says is about to take off.

Delta Air Lines has traded in a range since its shares fell sharply leading into August. But Andrew Keene of AlphaShark believes the technicals are showing a turnaround for the struggling carrier.

"I think the short-term bottom is in here, and I think we can make a move higher," he said Wednesday on CNBC's "Trading Nation."

The bottom Keene refers to sits at $36 on Delta's daily chart. Not only is the stock rising off of the $36 level once again, but Delta is also trading right around its 50-day moving average. Keene also looks at the company's previous high around $41 to determine that in the short term, the stock could move back up to the same level again.

"I use the options market to find a measured move target to the upside," he said. "They're implying that Delta can move $5 between December expiration."


Keene wants to buy the December 40-strike calls and sell the December 41-strike calls for a total cost of 25 cents per share, or $25 per options contract. If Delta closes at or above $41 by December expiration, that call spread will be worth $100 on the trade, or four times his initial premium.

Delta shares were down almost 2 percent in Wednesday trading, falling as low as $36.02. The Dow Jones U.S. airlines index is down about 19 percent this year.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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