Is MBIA heading for more volatility?
A long-term trade is looking for financial guarantor MBIA to make a big move higher or lower in the next 18 months.
A block of 14,094 January 2016 10 puts was bought for $1.70 today, according to optionMONSTER's Depth Charge tracking system. This is clearly a new position, as open interest in the strike was 2,072 contracts before the trade appeared.
Seconds later, the largest block of MBI stock traded with 451,008 shares purchased for $11.17. That exactly balances the delta of the options, making this a directionally neutral play that is looking for a big move up or down and/or for volatility to be greater than that implied by the puts. (See our Education section)
MBI is down 4.79 percent to $10.94 in midday trading. That adds to sharp losses by the in recent days, which was trading near $13 early last week.
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