Hartford Financial is rallying off its 2012 lows, and a large option spread appears to be looking for more gains.
HIG is up 1.87 percent to $17.44 in early afternoon trading, returning to levels of a month ago. The insurance and financial firm traded to its 2012 low of $15.65 a week ago after earnings results but has rallied strongly since then. Shares traded above $22 going into April.
Total option volume in the name tops 25,000 contracts, compared to a daily average of 6,000. A trader sold 10,000 January 2013 22 calls for the bid price of $0.19 against open interest of 29,485 while buying 10,000 January 2014 22 calls for $1.32. The latter was done against open interest of 519, so that part of the activity was an opening position.
This could be a calendar spread , a moderately bullish play that would take a maximum gain if shares climb to $22 through the beginning of next year. Or this could be a roll of a long-term call position, selling those nearer-term contracts to purchase the farther-out expiration to allow more time for the trade to work. (See our Education section)
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