American International Group Bull Believes in a Breakout

One American International Group Inc (AIG) option trader rolled her long call position out

Apr 8, 2015 at 11:08 AM
facebook twitter linkedin


American International Group Inc (NYSE:AIG) calls are flying off the shelves today, trading at 31 times what's typically seen at this point in the day. By the numbers, 89,000 calls have changed hands, compared to fewer than 2,300 puts.

Drilling down, the majority of the day's action occurred when two symmetrical blocks of 42,985 contracts traded at AIG's January 2016 and 2017 60-strike calls. According to Trade-Alert, this could be a result of one speculator rolling the long January 2016 calls (which appear to have been initiated last August) out to the January 2017 series. In other words, she's giving herself an extra 12 months for AIG to perforate the round-number $60 mark -- territory not charted since October 2008.

From a wider perspective, today's accelerated call activity is just more of the same. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AIG's 10-day call/put volume ratio of 5.12 ranks in the 92nd annual percentile. In other words, calls have been bought to open over puts with more rapidity just 8% of the time within the past year.

On the charts, AIG has been gaining ground since hitting a year-to-date low of $48.68 in late July, up 13.8% at $55.39. More recently, the shares have found a foothold atop their 40-day moving average, currently located at $54.97. Today, American International Group Inc (NYSE:AIG) is following the broader equities market higher -- up 0.7% -- amid news the Federal Aviation Administration (FAA) approved the insurance issue's request to operate drones. Elsewhere on the fundamental front, the company announced a new partnership with Primerica, Inc. (NYSE:PRI).

Daily Chart of AIG Since January 2015 With 40-Day Moving Average

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners