Biggest block of the day so far just printed in MGIC Investment Corp calls, with a seller of nearly 60,000 Jan13 10 calls for 23cents, followed a minute later by a purchase of nearly 21,000 Jan14 7 Calls for $1.40. Flow history shows the 60K likely close a long position opened in October when paper paid 33 to 45cents to open more than 100000 contracts. While shares have nearly doubled since then, IV has come in from about 120% to current level near 78% and the position did not pay off. The opening leg printed on the PHLX and appears to show a commitment to continue the long but at a smaller size of 21K contracts and closer-in strike. Total premium outlay is $1.56million after the credit from the 10 strike calls.
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.