A large bullish bet was placed on LUV on Friday by an option trader who sold 15’000 April 55 puts for 0.9 (0.9 bid – 1.0 ask). The volume was significantly higher than the open interest suggesting that this is a new position.
By selling 15’000 April puts, the trader committed over $17m into the trade and will bank $1.3m of profit, should the stock stay above $55 by expiration in April.
The stock has had an impressive run for the last several months. The company issued a strong recent earnings report, Buffett reported owning LUV and its trailing twelve months PE ratio stands at 15.31 compared to 20.20 on S&P 500.