AIG is off 41 cents to $32.89 on heavy volume of more than 105 million shares on news the Treasury Department sold a hefty chunk of the stock to end the government’s majority ownership of AIG. The stock fell to a low of $32.56 and is attempting to cling to a 50-day moving average after a four-day 5.5 percent slide. Options on AIG are seeing brisk trading as well. 55K calls and 29K puts so far, on pace for more than 500K contracts and the most since mid-2009. The top trade is an 8300-lot of Weekly (9/14) 32.5 calls for 67 cents when the market was 63 to 67 cents. It’s an opening buyer, possibly betting that today’s weakness will be short-lived. More than 13,000 of the weekly 32.5 calls now traded. The next biggest trade looks like a bearish Weekly 32.5 – Sep 34 risk-reversal for 13 cents, 1735X on ISE. Sep 33 calls, Jan 35 calls, Weekly 33 calls, and Sep 33 calls on AIG are also actively traded and 30-day ATM vols have eased about 7 percent to 29.
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.