Traders playing for rally in MetLife
(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Financials helped the market bounce yesterday, and the bulls were targeting MetLife.
optionMONSTER's Heat Seeker system showed that at least 8,000 May 52.50 calls were bought in the session, more than half of them trading in less than a minute for $0.85 and $0.88. Volume was well above the strike's previous open interest of 1,656 contracts, indicating that new positions were established.
These long calls lock in the price where the stock can be purchased through mid-May no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $52.50. (See our Education section)
MET rose 0.54 percent to $50.58 yesterday. The insurance firm bounced at $46 in late January, hit $53 earlier this month, and is now trying to hold support at its 50-day moving average. Shares have drifted between $46 and $57 since mid-2013.
Total option volume in the name topped 15,200 yesterday, quadruple its daily average for the last month. Overall calls outnumbered puts by more than 8.5 to 1, reflecting the session's bullish sentiment.
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