Chimera Investment spiked higher Friday, prompting a slew of
Most of the trades resulted from investors selling about 8,937
December 5 contracts for $0.10 against open interest of just 67.
There was also buying of the September 5 calls for $0.10 and $0.15,
plus the June 5 calls for $0.05, although volume in both was below
Overall options volume in finance company was 23 times greater than
CIM gapped higher on the open and closed up 2.99 percent to $4.13.
The company, organized as a real-estate investment trust, makes
money by owning mortgage-backed securities. It raised its dividend
in December, resulting in a forward yield of 17 percent.
The shares have been trapped between $3.50 and $4.25 since August.
Friday's gains came despite a lack of apparent news, though some
buyers may be targeting the stock amid improvement in the housing
and home-lending sectors. Builders and mortgage-insurance companies
have been rallying this month.
While the call selling may initially appear bearish, it could also
result from an investor writing CIM options to maintain a short
position in volatility, which has fallen to 40 percent on the stock
from 84 percent in November.
CIM last reported earnings on Feb. 8 and hasn't yet indicated when
the next release will be issued.
(Chart courtesy of tradeMONSTER)
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