MBIA (MBI) is up 26 cents to $10.06 in active trading of 2.8 million shares on speculation related to a BofA/Merrill settlement (Briefing). Options on the mortgage insurance company are active as well. 18,000 calls and 865 puts traded in MBI so far. The top trade is a 6000-lot of May 12 calls for 76 cents per contract when the market ws 73 to 77 cents. The next biggest trade is 1000 Aug 10 calls at $2.25 and coincided with 500 Aug 9 calls at $2.25 and might be a closing 1X2, as open interest is sufficient to cover and both contracts are now in-the-money. Beyond that, the action has been in smaller lots and includes a May 11 – 14 call spread for 74 cents, 232X. Overall, the flow seems somewhat bullish and levels of implied volatility moved up 11 percent to 88.
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.