Higher volatility expected in Flagstar

Chris McKhann (chris.mckhann@optionmonster.com)

Someone thinks the price action will start hopping in Flagstar Bancorp.

optionMONSTER's monitoring systems show that 5,000 of the April 15 puts were bought yesterday for the ask price of $1.15 on a relatively wide bid/ask spread. Open interest was just 162 contracts previously, so this was a new opening position.

Less than two minutes later, the largest block of stock hit as 160,000 shares were bought for $16.7025. Combined with the puts, this creates a delta-neutral play that is looking for higher volatility in the name. So the trader appears to expect big fluctuations in the stock, rather than a move in a specific direction. (See our Education section)

FBC rose 0.37 percent to $16.46. It jumped on earnings last week from below $15 but is still down from over $20 at the high at the start of the year.

More than 5,600 options changed hands overall, topping the total open interest for the name and eclipsing the daily average volume of 251 contracts. 


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