MGIC Investment has leapt today, but one trader doubts the move.
optionMONSTER's monitoring programs detected the sale of about
40,000 December 3 calls against open interest of just 6,329
contracts. Premiums fell as the trades crossed, which reflects
strong selling pressure, and the largest block priced for $0.20.
MTG is up 8.53 percent to $2.80 in morning trading but is off its
highs for the session. The financial guarantor has continued to
struggle in the wake of the mortgage meltdown but recently
attracted some bullish interest after famed hedge-fund manager Kyle
Bass disclosed he had taken a small position in the name. Bass had
profited from the 2008 collapse and now believes that the worst of
the crisis has worked its way through the system.
Nonetheless, MTG is facing resistance at its 100-day moving
average, which could lead some chart watchers to believe that it's
not ready for a sustained rally yet. Investors often sell calls in
response to such a situation. (See our
Overall option volume in the name is more than 10 times greater
than average so far today.
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