AIG has been rebounding as the government sells its stake in the company, and one trader is buying time for more gains.
The global insurance firm ended Friday at $35.02, up 1.7 percent on the session and its highest close since March 2011. Shares were below $20 last October and tested support at $27 at the start of June.
The action was in the weekly calls that expire this coming Friday. A trader sold 20,000 of the expiring 32.50 calls for $2.45 against open interest of 20,616 while buying 20,000 of 32.50 calls for $2.47. There was no open interest at the latter strike.
This was clearly a roll of an in-the-money call position from the contracts that are expiring at the end of the week. Some traders use such calls instead of owning the stock to get exposure to the upside with limited risk while paying a minimum in terms of option time premium . (See our Education section)
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