Options Trading News

April 10, 2013  Wed 11:09 AM CT

A trader is opening a highly bullish position in MBIA as shares of the financial-insurance company rebound today.

optionMONSTER Heat Seeker system shows that a trader bought 10,000 August 13 calls for the ask price of $1.17 and sold the same number of the August 16 calls for their bid price of $0.54. The volume at each strike was well above the previous open interest, indicating new activity.

This bullish call spread cost $0.63 to open, which is the maximum amount at risk if MBI remains below $13. The maximum gain of $2.37 would be realized if shares are above $16 at that time. (See our Education section)

MBI is up 1.81 percent to $10.66 in early afternoon trading. Shares hit a 52-week high of $13.02 a month ago and were last above $16 in September 2008.

More than 27,600 MBI options trade with calls outpacing puts by more than 10 to 1. 
Share this article with your friends

Related Stories


Big put sale bets on floor in MBIA

September 10, 2015

The bond-insurance firm gapped down from on June 29 with fears that it had heavy exposure in Puerto Rico's debt crisis, but shares have been working their way higher since.


Premium Services

Archived Webinar

Education & Strategy

Options Academy: More on the Covered Call Strategy

Last week, we talked about the Covered Call and the misconceptions that surround it. We spoke about how an investor must realize that the Covered Call is actually a premium collection strategy and not so much a directional one. If an investor can grasp this idea, the investor stands to do a heck of a lot better in the strategy than they currently do.

View more education articles »