One investor is waiting for a breakout in Annaly Capital
Management as the stock challenges long-term resistance.
optionMONSTER's Heat Seeker tracking system detected the purchase
of about 15,000 January 17.50 calls for $0.79. A matching number of
July 18 calls was sold at the same time for $0.21 against previous
NLY is up 0.08 percent to $18.15 in early afternoon trading and has
been pushing against its current level since late 2009. The company
is organized as a real-estate investment trust and generates a huge
stream of income by borrowing in the short term and investing in
higher-yielding securities that mature later.
That allows it to have a rich dividend yield of about 14 percent.
Today's option transaction apparently resulted from an investor
rolling an existing position from one strike to the other, gaining
an additional six months of long exposure at a cost of $0.58.
However, considering the added intrinsic value from going deeper in
the money, they only paid an additional $0.08. (See our Education
If NLY does break resistance, the trader will enjoy significant
leverage even if the stock's advance is quite modest.
Overall option volume in the name is 5 times greater than average
so far today, with calls accounting for a bullish 91 percent of the
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