US Airways Group (LCC) is expecting to earn a small profit for the first quarter despite disruptions due to the weather and temporarily nation-wide shut down of the airline’s check-in kiosks due to a computer malfunction.
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In a statement released Friday, US Airways President Scott Kirby said, “We are happy to have the first quarter of 2007 behind us. Two significant ice storms around Valentine’s Day and St. Patrick’s Day led to major disruptions in our Philadelphia hub and we created our own problems with a difficult reservation system migration in early March. Despite the disruption, we still project a slight profit (excluding special items) for the first quarter.”
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In an note predicting a strong summer for the airline industry, Clayton Securities reported, “As the airline industry heads into the strong spring season, many carriers will begin seeing the benefits of cost cutting.” The report went on to say, Even though we expect all sectors … to rally, we favor the legacy sector in the immediate future, since they can better take advantage of the upside cycle with their vast systems, progress in making cost cuts and broad yield management systems.”
One of the airline industries brightest stocks is American Airlines (AMR). The stock has gained over 15% over the past year. Other notable successes include, Air France (AKH) nearly 100% 52-week gains and British Airways (BAB) with over 60% 52-week gains.
If an investor has a general notion about a sector, as may be the case in this situation, they can use PowerOptions‘ powerful search tools to narrow down their trade choices. An investor can specify a number of criteria (i.e. sector, return, analyst’s rating…) to meet their investment needs. Visit PowerOptions today and try their powerful search tools yourself for a no-risk 14-day trial period.
Potential Trades:
All of the following option trades have 44 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered call search Major Airlines Sector (44 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMR | $32.35 | IGSEG | 07 MAY $35.00 | $1.05 | 3.20% | 3.40% | 11.80% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMR | $32.35 | AMREF | 07 MAY $30.00 | $3.50 | 10.80% | 4.00% | 4.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAL | $40.24 | CALEH | 07 MAY $40.00 | $2.80 | 7.00% | 6.80% | 6.80% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UAUA | $40.94 | UALEH | 07 MAY $40.00 | $3.00 | 7.30% | 5.40% | 5.40% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AMR – AMR Corporation is the parent company of American Airlines. The first trade involves the May $35 call option and offers 3.2% downside protection and 11.8% potential profit if the stock is above the $35 strike price at the end of the option period. The second trade, a more conservative trade, involves the May $30.00 call option and offers 10.8% downside protection and 4.0% potential profit if the stock is above the $30.00 strike price at the end of the option period. The stock is currently trading at $32.35.
CAL – This Continental Airlines trade involves the May $40 call option and offers 7.0% downside protection and 6.8% potential profit if the stock is above the $40.00 strike price at the end of the option period. The stock is currently trading at $40.24.
UAUA – UAL Corp. is the parent company for United Airlines. This trade involves the May $40 call option and offers 7.3% downside protection and 5.4% potential profit if the stock is above the $40.00 strike price at the end of the option period. The stock is currently trading at $40.94.
Competitors:
Competitors for AMR include: Delta Air Lines Inc. (DALRQ.PK), Northwest Airlines Corp. (NWACQ.PK), UAL Corp. (UAUA), Alaska Air Group Inc. (ALK), Continental Airlines Inc. (CAL), JetBlue Airways Corp. (JBLU), US Airways Group Inc. (LCC), Southwest Airlines Co. (LUV), and ExpressJet Hldgs. (XJT).
Competitors for CAL include: AMR Corporation (AMR), Southwest Airlines Co. (LUV), and UAL Corp. (UAUA).
Competitors for UAUA include: AMR Corporation (AMR), Delta Air Lines Inc. (DALRQ.PK), Northwest Airlines Corp. (NWACQ.PK), British Airways PLC (BAB), Continental Airlines Inc. (CAL), Frontier Airlines Inc. (FRNT), JetBlue Airways Corp. (JBLU), US Airways Group Inc. (LCC), Midwest Air Group Inc. (MEH), and ExpressJet Hldgs. (XJT).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
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[tags] Scott Kirby, Clayton Securities, ALK, Alaska Air Group Inc., AMR, AMR Corp., BAB, British Airways PLC, CAL, Continental Airlines Inc., FRNT, Frontier Airlines Inc., JBLU, JetBlue Airways Corp., LCC, US Airways Group Inc., LUV, Southwest Airlines Co., MEH, Midwest Air Group Inc., UAUA, UAL Corp., XJT, ExpressJet Hldgs., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]