One big investor is getting interested in Ambac Financial, a
casualty of the 2008 crash that emerged from bankruptcy earlier
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 6,100 February 20 calls for $1.10. Volume is almost 8
times previous open interest at the strike, indicating that new
positions were initiated.
lock in the price where investors can buy shares in the
municipal-bond insurer, letting them cheaply position for a rally.
The contracts can also generate significant leverage in the event
of a rally. (See our
AMBC is down 4.13 percent to $16.03 in morning trading and has lost
30 percent in the last three months. The company entered Chapter 11
bankruptcy in November 2010 following losses caused by the
subprime-mortgage crisis. It mostly traded between $20 and $26 this
year before dipping under $20 in September.
The next earnings report is scheduled for Nov. 14, so today's
contracts would profit from a strong set of numbers.
Total option volume is 21 times greater than average so far today,
according to Heat Seeker. Calls outnumber puts by more than 400 to
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