Option bulls emerge in AMR Corp as crude oil falls

By Doris Frankel

CHICAGO (Reuters) - The drop in crude oil prices on Thursday may have spurred some investors to scoop up bullish call options in AMR Corp's (AMR.N) American Airlines in hopes of catching extended share price gains in the next few months.

In afternoon trade, about 16,000 calls and 1,644 puts traded in American Airlines, exceeding the combined daily volume of 13,000 contracts, data from option analytics firm Trade Alert show.

AMR shares jumped 8.8 percent to $9.21 on the New York Stock Exchange, more than double its 52-week low of $4 in July.

"In looking for the reason for the call activity, perhaps the weak energy environment allows airline companies to retool themselves by locking into lower fuel costs over the next few years," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

U.S. crude oil futures extended losses to more than $3 a barrel on Thursday, to nearly a four-year low, amid demand worries in a recession and as bearish natural gas storage data also pressured the energy complex.

On the New York Mercantile Exchange at 1:14 p.m. EST (1814 GMT), January crude CLF9 was down $2.75, or 5.88 percent, at $44.04 a barrel, trading from $43.77 -- the lowest since $42.80 was struck on Jan. 6, 2005 -- to $47.27.

In the options market, call buyers emerged trying to lock into American's rising share price, analysts said.

The most active options were the January $10 and the February $9 call strikes, conveying the right to buy American shares at $10 and $9 a piece, respectively, over the next quarter.  Continued...