On Friday’s Options Action, the crew analyzed the performance of transportation stocks. The Dow Jones Transportation average has made new highs this past week, suggesting a leading sector of the economy. FedEx has underperformed the sector and reports earnings tomorrow, proving a catalyst to catchup to the group. Coupled with a cheap valulation and expecting a jump higher Michael Khouw suggests buying Nov 260/280 Call Vertical for a $5.90 Debit. As of Friday’s close, this spread is trading at $5.40.
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