XL Group has been gradually working its way higher, but one investor apparently thinks that it will be slow going for the insurance company.
optionMONSTER's tracking systems detected the sale of 7,000 June 24 calls for $0.48 and 7,000 June 23 puts for $0.48. Volume was more than twice open interest in both strikes.
The trade, known as a short strangle, generated a credit of $0.96. The investor will get to keep that money if XL closes between $23 and $24 on expiration, with gains eroding on either side of that range. (See our Education section for more on market-neutral strategies.)
XL is up 1.07 percent to $23.62 in midday trading and has risen 8 percent so far this year. It's been making higher highs and higher lows since last summer but is pushing against a major resistance level from mid-2008, which may be leading some chart watchers to expect a range-bound trade.
Overall option volume in the name is almost triple the daily average so far today, with the short strangle accounting for almost all the activity.
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