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Why trader is selling calls in MetLife

Chris McKhann (chris.mckhann@optionmonster.com)

A trader is betting that upside will be limited in MetLife even as its shares gain ground.

More than 10,000 March 38 calls traded against open interest of 7,056, according to optionMONSTER's tracking systems. The calls were sold, with the largest block of 7,724 going off $0.62.

The options aren't tied to any trading in the underlying shares that we can see today, so the calls could have been sold naked with an in initial bearish bias. Alternatively, they could have been traded against an existing long position in MET shares in a covered call strategy, which would be bullish up to the $38 strike price. (See our Education section)

MET is up 0.18 percent to $33.67, sitting in the middle of a recent range between about $32 and $37. The insurance company's stock was as high as $34.33 as management held an investor call this morning.

More than 26,000 MET options have changed hands so far today, double its daily average in the last month.

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