Learn the trade here. Make it on tradeMONSTER

Options Trading News

October 11, 2012  Thu 3:45 AM CT

MBI: SEE CHART GET CHAIN FIND STRATEGIES
MBIA drew long-term put buying yesterday for the second time in less than a week.

More than 73,000 MBI options traded, compared to a daily average of 3,800. Puts outpaced calls by more than 10 to 1, led by 57,000 that traded in the January 2014 5 strike against open interest of 15,173 contracts.

These puts were bought throughout the morning for $0.57 up to $0.63, with the biggest block of 30,000 going for the bid price of $0.60, according to optionMONSTER's Depth Charge tracking system. Last Thursday a trader bought 14,000 puts at the same strike.

MBI fell 2.46 percent yesterday to close at $10.29. The company, which backstops municipal and asset-backed debt, started the week above $11 and was up at $12 in mid-September.

The put buying appears to be a straightforward bet that the stock will drop sharply to levels last seen at the end of 2009, when it traded as low as $3.19. It is not likely a hedge on a long position because the puts are more than 50 percent out of the money. (See our Education section)
Share this article with your friends


Related Stories

MBI

Big call sale sees ceiling in MBIA

August 26, 2014

The financial guarantor has been hovering near current levels for the last two weeks after bouncing off a 52-week low on Aug. 12.

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Education & Strategy

It's all skewed up

Most new option traders know little about implied volatility, and learn the hard way. Today we want to help you...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER