Assured Guaranty draws hedge
A large investor appears to be protecting recent gains in Assured Guaranty.
optionMONSTER's Depth Charge system detected the purchase of 2,000 June 30 puts for $0.39 to $0.46 this morning. Open interest was only 160 contracts before the trade occurred, showing that it is a new position.
Long puts lock in the price where the stock can be sold no matter how far it might drop, gaining value in a selloff. Although the contracts can be used to make outright bearish bets, today's puts were likely purchased as a protective hedge on a long position given the recent jump in shares. (See our Education section)
AGO is up 0.21 percent $28.94 in early trade. The bond-insurance company gapped up from $26 after reporting quarterly results on May 7 and has risen steadily since.
Today's put sale makes up about 90 percent of the total option volume in the name, which is already above its full-session average for the last month.
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