One investor is milking profits from Comerica as the Dallas
lender works its way higher.
optionMONSTER's monitoring programs detected the sale of 3,603
January 30 calls for $5.89 and the sale of an equal number of April
28 calls for $6.94. Volume was below open interest in the 28s but
above it in the 30s, suggesting that an existing position was
closed and rolled forward in time.
CMA is trading at $35.05 this afternoon, up 2.01 percent on the
session and 15 percent in the last three months. Like many
financials, it continues to trade for less than book value after
the 2008 crash, which has been drawing a steady stream of buyers to
Today's option trader probably owns shares and previously sold the
28s as part of a
strategy. Adjusting the position cost $1.05 and raised by $2 the
level at which they will be forced to unload their stock. It also
keeps the trader in the position for an additional eight months,
during which they can collect CMA's 2 percent dividend yield.
Given that the calls are
deep in the money
, the strategy is highly conservative and more akin to a
fixed-income position than an equity trade. (See our
section for more on how options can be accomplish a wide array of
Almost 7,600 contracts have traded in CMA so far today, compared
with just 1,040 in a typical session. Calls outnumber puts by 87 to
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.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.