Trucking names CNW and ABFS are topping the OptionsHouse Hotlist today on news that YRC Worldwide YRCW has avoided bankruptcy in a debt for equity exchange. These competitors had rallied in recent weeks on speculation that their competitor might be forced into bankruptcy and possible liquidation. On today’s news each company is down close to 10%. The hotlist is picking up upside calls in each being sold. The 40 calls in CNW and the 35 calls in ABFS. To me this expresses the view that further upside in these names is limited. These are likely closing transactions as the Open Interest is greater than the volume traded today.
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