Bearing down on Delta Air Lines (NYSE: DAL)

Altitude for Delta Air Lines Inc. (NYSE: DAL) shares might not soar into the stratosphere throughout the near-term, according to at least one investor who likely rolled a bearish front-month position out one month.

DAL did not announce any news this morning and the shares are currently trading up four cents to $13.02. The airline sector has remained mixed throughout the last week, and ONN.tv covered an interesting strangle buyer on March 4 when the stock was trading at $12.69.

Around 11:30 a.m. EST, more than 7,500 March 13 calls changed hands versus open interest of nearly 22,000 contracts while the same number of April 13 calls crossed the tape versus current open interest of 1,600 contracts. These open interest and volume discrepancies suggest investors closed the front-month options and opened the April 13-strike calls. A look at time and sales shows the March 13 calls traded for 15 cents per contract, and the April 13 calls hit the tape for 65 cents per contract. Investors most likely bought the March 13 calls back and sold to open the April 13 calls, collecting a net credit of 50 cents per roll to maintain bearishness in the airline name.

The March 13-strike calls have an implied volatility of 33% and implied volatility of the April 13-strike calls is 45%. These levels compare to a 30-day historical volatility of 52%. Investors who rolled out the short call position to April will make money if DAL shares close lower than $13.65 at April options expiration in 30 days.

Keep in mind that this bearish roll factors in a potential 5% rally throughout the near-term before investors begin to lose money. So, at least one investor expects DAL shares to experience limited upside prior to April options expiration.

For a full visual of the risk/reward dynamics of the short April 13-strike call position, open a free virtual trading account. If you like this, or other option trades that ONN.tv covers, start trading with 100 commission-free trades at OptionsHouse.