Credit: Shutterstock photoGenworth Financial is back to levels from mid-2009, but one bull is taking another shot on the long side.
optionMONSTER's Heat Seeker tracking system detected the purchase of 10,500 September 5 calls for $1.74. An equal number of September 6 calls was sold at the same time for $0.98, but volume exactly matched open interest. This suggests that an existing position was rolled to the lower strike.
The trade resulted in a debit of $0.76 and will increase the investor's leverage if the insurance and wealth-management company rallies higher. It also reduces the amount of money that will be lost to time decay as expiration approaches. (See our Education section)
GNW is down 6.78 percent to $6.32 in morning trading and has lost more than half its value so far this year. The stock attempted to rally on July 29, when CEO Michael Frazier suggested the company might break up. It then followed the broader market lower, but some investors may consider that a long-term bullish factor and thus want to be long the name.
Overall option volume in GNW is triple the daily average so far today, with calls outnumbering puts by 3 to 1.
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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.
