Sarah Wasserman (swasserman@sir-inc.com) Insurance issue Aetna Inc. (AET) saw a surge in option activity on Friday, with roughly 44,000 contracts crossing the tape -- six times the stock's expected single-session option volume. Calls were incredibly popular, with some 33,000 of these bullishly oriented options changing hands.
Friday's accelerated call activity is nothing new for AET, which has racked up a 10-day International Securities Exchange (ISE) call/put volume ratio of 9.3. Not only does this ratio reveal that calls have been nine times more popular than their put counterparts lately, but it also ranks above 97% of all other readings taken during the past year.
Option players favored AET's December 32 call on Friday, with over 17,000 contracts traded at this strike -- the majority of which crossed at the ask price, indicating that they were likely purchased. Open interest ballooned by 15,096 contracts over the weekend, confirming that fresh bullish positions were added here. By buying to open the December 32 call, traders are counting on AET to muscle above the $32 level over the next month. The shares are currently perched at $31.17.
This bullish attitude among traders is somewhat questionable, given AET's technical performance of late. Since mid-September, the shares have been range-bound in the $30 to $32 neighborhood, with the $32 level serving as a staunch technical ceiling for the shares. In fact, AET has not closed a session above $32 since April 13.
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