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    It's A Good Time To Play Options With Airliners

    Wed, 05/09/2012 - 15:01 EDT - Seeking Alpha
    • ALK
    • DAL
    • Jacob Steinberg
    • LCC
    • LUV

    By Jacob Steinberg:Airline companies are unique in many ways. They are cyclical, volatile and prone to bankruptcies. Airline industry is affected by many outside factors such as the overall economy, global trends, oil prices, labor market, regulations and issues or threats related to war and terrorism. Many different factors must come together before an airline company becomes successful. Interestingly enough, now is a good time to buy shares of airline companies and sell covered calls on these shares.You may wonder why now is a good time. First of all, this is a time when many airline companies posted stronger than expected results. Many airline companies had recent rallies, yet their P/E ratios are low compared to historical standards. For example, Delta Airlines (DAL) enjoys a trailing P/E ratio of 7 and forward P/E ratio of 6, whereas the company's historical average is well above 10. US Airways (LCC) enjoys a trailingComplete Story »

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