Sarah Wasserman (swasserman@sir-inc.com) After the close on Thursday, Oct. 28, MetLife, Inc. (MET) will report its third-quarter earnings. For the quarter, analysts are predicting a profit of $1.03 per share for MET. Historically speaking, the insurance issue has met or exceeded analysts' predictions in each of the past four quarters.
Technically speaking, MET has been a bit stagnant lately, with the shares hovering between $39 and $41 for the past several weeks. In fact, judging by today's option activity, it seems that one speculator is counting on MET to remain locked in this range-bound rut for the next two months.
Late this morning, 180 December 41 calls, marked "spread," traded at the bid price of $1.30. At the same time, a symmetrical block of December 39 puts, also designated "spread," crossed the tape at the bid price of $1.65, for a total credit of $2.95 for the short strangle.
By initiating this short strangle, the option strategist is betting that MET will remain between $36.05 (put strike - net credit) and $43.95 (call strike + net credit) until these contracts expire in December. For the record, MET has not closed a session below $36 since February, and the insurance concern has not closed a session above $43 since May.
At last check, MET had backpedaled 0.8% to trade around $40.01.
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