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What's behind call selling in CIT Group

By optionMONSTER,  July 16, 2012, 11:46:58 AM EDT

CIT Group has been weak, and traders see headwinds against a huge rally.

optionMONSTER's tracking systems detected the sale of about 3,500 January 40 calls, most of which priced for $1. Volume was almost triple open interest in the strike.

The investors are now obligated to sell shares in the small-business lender for $40 if they close at or above that level on expiration. They probably owns the stock and sold the calls to earn income on their positions . (See our Education section)

CIT is down 0.96 percent to $34.99 in morning trading. It lost more than one-quarter of its value between mid-March and early June but has been slowly working higher since. The next earnings report is scheduled for the morning of July 30.

Overall option volume is twice the daily average so far in the session.




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.


This article appears in: Investing, Options

Referenced Stocks: CIT



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