Shares of UAL were cruising along just below short-term resistance at the 12.50 level until about 11:00 a.m. Eastern time, when traders caught wind of an erroneous report that the United Airlines parent was on the verge of filing bankruptcy. The story was first posted in the Chicago Tribune, which said that the 4-year old story was mistakenly released. UAL immediately decried the report as "untrue."Unfortunately for UAL, the story was apparently picked up by the Sun Sentinel, after which the news gained traction with traders. UAL shares plunged nearly 100% by 11:07 a.m., touching a penny per share, and nearly wiping out the stock before trading could be halted. The company has since demanded a retraction from the Sun Sentinel, and said it is launching an investigation.
Trading has since resumed on UAUA shares, with the stock last seen hovering just below $12 per share - a vast improvement over pre-halt levels. Naturally, options traders jumped on this morning's news, sending more than 14,800 put contracts across the tape on UAUA before trading was stopped.
