UAL Finding Lift-Off As COVID Outlook Brightens

Have you been waiting for some normality to return? Well, so have companies like United Airlines Holdings Inc (Nasdaq: UAL), and option traders appear to be sharing that optimism. The result was UAL finished trading today nearly 7% higher on the session.  The surge came following positive news on the Wall Street Journal (WSJ) showing herd immunity may arrive much sooner than the Federal government is willing to acknowledge.

COVID News

The encouraging news for UAL came in the form of an op-ed written for the WSJ, Johns Hopkins surgeon, Dr. Marty Makary discussed the likelihood of the U.S. reaching herd immunity by April. In the publication, he discussed his outlook as follows:

"There is reason to think the country is racing toward an extremely low level of infection.

As more people have been infected, most of whom have mild or no symptoms, there are fewer Americans left to be infected.

At the current trajectory, I expect Covid will be mostly gone by April, allowing Americans to resume normal life."

The outlook comes following a 77% drop in COVID infections in the past six weeks! After the dark winter of COVID policies, this comes as good news for those wanting more and likely those who have been concerned about the infection rates. Given the fact that the data is estimated to capture only about 10% of actual COVID cases, that data suggests that nearly 55% of the population have natural immunity and about 15% have been vaccinated.

UAL Option Activity

The bullish news and the potential of significant stimulus payments in the works is certainly bullish for markets and relative value stocks like UAL. This is certainly part of the bullish backdrop of today’s rally in UAL and significant option activity.

For the session, option volume was over four times the average. The calls were sizzling at nearly five times the 5-day average volume while puts traded at nearly three times the average. Nearly 40% of calls were traded at the ask and 39% of puts traded at the bid. The result is bullish activity on the call and put side of the ledger. The put-to-call ratio was 0.281 on the session. Here’s a breakdown of the significant activity:

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