Markets

Unusual bullish trade on Hartford

Hartford Financial Services Group has been dropping like a rock, but one trader is calling a bottom today.

optionMONSTER's Heat Seeker tracking system detected an unusual two-part strategy in the life insurance stock. There were several broken and reversed trades, but it appears that the investor sold about 7,600 March 21 puts for $1.22 and purchased about 5,200 March 24 calls for $1.59. Volume was more than 3 times open interest in both strikes.

HIG gapped higher on the open and is up 3.28 percent to $22.99 in morning trading. It had jumped early last month after a strong earnings report but then rolled over around $26.50 and proceeded to head straight down.

Today's option trade is designed to leverage a rebound, allowing the investor to use premium from writing the puts to finance the cost of owning the calls. It will make unlimited profits if

HIG rallies past $24 and face losses below $21.

Overall option volume in the stock is about 3 times greater than average.

(Chart courtesy of tradeMONSTER)

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


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

In This Story

HIG

Other Topics

Options

Latest Markets Videos