Investors are turning time into money with Allstate.
optionMONSTER's monitoring systems detected the sale of 13,000
January 33 calls for $2.34 and the purchase of an equal number of
January 32 calls for $2.99. Volume was below open interest in the
32s, indicating that an existing short position was closed and
rolled to the higher strike.
The investor probably owns shares in the Illinois-based insurance
company and is selling calls against the stock to earn income. In
adjusting the position for $0.65 yesterday, the trader raised by $1
the level at which he or she must sell the shares.
is a common strategy that reduces volatility and makes an equity
position behave more like a fixed-income investment. Quarterly cash
dividends can also be collected while holding the stock to further
offset its cost. (See our
ALL fell 1.29 percent to $33.65 yesterday but is up more than 45
percent since early October. The stock is now back near the level
where it hit resistance in 2010 and 2011, which could be leading
some chart watchers to expect it to churn in a range.
Shortly after the January puts traded, an investor bought back more
than 6,000 October 35 calls for $0.76 and sold the January 36s for
$1. A similar trade also occurred in the January 33 calls and the
August 33s for a net credit of $0.52.
Overall option volume in ALL was 41 times greater than average in
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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