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AIG facing short-term bearish trade

Chris McKhann (chris.mckhann@optionmonster.com)

A near-term put trade is positioning for a possible drop in American International Group by the end of this week.

optionMONSTER's Depth Charge system shows that a trader sold 7,500 June 44 puts for the bid price of $0.29 in volume that was below the previous open interest of 12,853 contracts. At the same time, he or she bought 7,500 June 45.50 puts for their ask price of $0.80 against open interest was just 30 at that strike, so it was a new position.

The trader could be rolling the options to a lower strike price, as they have just a week left to trade. Or this could be a new vertical spread , in which case the trader is clearly bearish at least down to $44 in next week. (See our Education section)

AIG finished the week at $45.38, down 1.22 percent on Friday. The insurance giant hit a high of $46.46 two weeks ago but was down at $38 two months ago.

Total option volume in the name was 84,763 on Friday, twice its daily average for the last month.

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