Markets

Bulls won't quit Transatlantic

Transatlantic Holdings keeps getting beaten down, but the bulls are sticking around.

optionMONSTER's Heat Seeker tracking system detected the purchase of about 5,000 October 50 calls for $2.375 and the sale of an equal number of September 50 calls for $1.20, Volume was below open interest in September contracts but not October, which suggests that an existing long position was rolled from one month to the next.

The trade cost about $1.175 and will give the investor more time for the shares to rally. It's also possible that both positions were opened, in which case the trade would be a long calendar spread, and reflect a belief that the insurance stock will stay below $50 for the next three weeks.

TRH rose 0.21 percent to $48.68 in afternoon trading and is up 6 percent in the last three months. It gapped higher in mid-June on takeover speculation, and then again one month later after receiving an offer from Validus Holdings. It rejected that bid and is in the process of fighting another one from Allied World.

Overall options volume is 13 times greater than average so far today, with calls outnumbering puts by more than 80 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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