Market News

December 11, 2012  Tue 11:40 AM CT

As Genworth Financial continues to climb, one trader is positioning for greater volatility.

More than 28,000 GNW options have traded so far today, about 5 times its daily average in the last month. The biggest trade came in the January 2015 5 puts.

optionMONSTER systems show that a trader bought 10,000 of those puts for $1.12. The open interest was just 600 at the start of the session, so this is a new position.

About 30 seconds later, the trader bought 200,000 shares of GNW for $6.94. The delta of the options is -0.2, and the total delta of the position is -200,000. The purchase of the stock makes the overall position delta-neutral, meaning that the trade is focused on volatility as opposed to a specific direction.

GNW is up 2.98 percent to $6.92 in afternoon trading, pulling back from a high of $7.13 this morning. These are the highest levels for the investment and insurance firm since shares gapped down in mid-April. It was  down at $4.06 at the start of August.
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