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May 15, 2013  Wed 9:41 AM CT

RDN: SEE CHART GET CHAIN FIND STRATEGIES
An unusual long-term call trade is targeting Radian today as the mortgage-insurance firm hits two-year highs.

optionMONSTER systems show that a trader sold 4,050 January 2015 15 calls for $3.20, below the listed bid price at the time, in volume that was far above previous open interest of just 710 contracts. Seconds later, a block of 2,625 January 2014 10 calls traded for $4.80 against open interest of 16,481 at that strike.

This could be a new diagonal spread, which would be bullish up to $15 in the long term. But this could also be a roll of a short-call position, with the trader buying back the now in-the-money 10 contracts and selling the longer-term 15 calls. (See our Education section)

RDN is up 2 percent to $14.27 this morning as shares trade at their highest level since May 2010. The stock was trading at $10 less than a month ago and at $2 a year ago.
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