JetBlue Airways Corporation (NASDAQ:JBLU) – Takeover chatter sparked heavier than usual trading traffic in out-of-the-money call options on air carrier, JetBlue Airways Corporation (NASDAQ:JBLU), this morning. Shares in the name rose as much as 9.0% near the open to $6.63, the highest level since mid-May, after a report in Brazilian newspaper, Folha de S.Paulo, on Friday said that David Neeleman, the founder and former CEO of JetBlue Airways Corporation (NASDAQ:JBLU) and current owner of Brazilian airline Azul Linhas Aereas, is creating an investment fund to buy back control of the company and purchase TAP, a Portuguese airline. Neeleman, according to a report by Bloomberg reporter, Mary Schlangenstein, said, “No talks are underway” for such a fund during a telephone interview today. Shares are well off earlier highs, but remain up 3.3% at $6.28. Options on JetBlue Airways Corporation (NASDAQ:JBLU) popped on the unconfirmed takeover rumors, with volume rising to 12,100 contracts by 11:40 a.m. ET versus the usual average daily volume of around 1,100 contracts. The Jul $7.0 strike calls are the most active, with some 7,300 contracts traded as of the time of this writing. It looks like most of the calls were purchased by for an average premium of $0.075 each. The bullish position may be profitable at expiration next month if shares in JetBlue Airways Corporation (NASDAQ:JBLU) rally more than 12% over the current price of $6.28 to surpass the average breakeven point at $7.075.
Caitlin Duffy
Equity Options Analyst
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