Credit trends have been improving, and the bulls think that
iStar Financial will benefit.
optionMONSTER's tracking systems detected the purchase of 2,500
January 12 calls for $1.15 and the sale of 3,000 April 13 calls for
$0.925. Volume was below open interest in the January contracts,
indicating that an existing short position was closed and rolled
forward in time.
There was heavy buying in the shares around the same time, so it
appears that a bullish
was at play. The investor probably owned about 250,000 shares and
had sold the January 12 calls against them to earn income and
He or she then rolled that position forward in time, increased its
size, and apparently bought more stock. That increased the stake in
the commercial-mortgage company and raised the exit price by $1.
The adjustment also keeps the investor in the name for an
additional three months. (See our
SFI rose 3.09 percent to $12.67 yesterday but remains well below
the $50 price it commanded before the 2008 credit crisis. The stock
has been slowly working its way back from the crash, but it still
trades for less than 0.8 times book value.
Other financials such as Bank of America and MGIC Investment, which
also trade well below their pre-crash highs, have been rallying in
the last week after citing lower delinquencies on loans. SFI
reports quarterly results on Oct. 29, so traders may be looking for
strong numbers as well.
Total option volume was 36 times greater than average in the
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