Metlife Inc (MET) Options Volume Surges After 'Too Big to Fail' Decision

A court ruled to remove the "too big to fail" label from Metlife Inc (NYSE:MET)

Mar 30, 2016 at 11:36 AM
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Metlife Inc (NYSE:MET) has surged after a U.S. district judge ruled to remove the U.S. government's "too big to fail" label from the company. The shares are now 5.3% higher at $44.72, with volume running in the 99th percentile of its annual range. Meanwhile, MET's options pits are also seeing heavy activity, as traders bet on extended gains from the insurance stock. 

By the numbers, MET calls are crossing at six times the average intraday pace, outpacing put options by a nearly 5-to-1 margin. The most popular option is the weekly 4/1 45-strike call, which is being bought to open in the hopes of MET toppling $45 before the contracts expire at the end of this week. 

Heavy call buying is nothing new for MET, though. The stock's 20-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 3.34. In other words, long calls have been more than tripled long puts recently. 

Analysts are firmly in the bullish corner when it comes to MET. Eleven of the 14 brokerages that track the stock say it's at least a "buy," and zero call it a "sell." 

However, today's pop still leaves Metlife Inc (NYSE:MET) below breakeven in 2016. Plus, after initially surging above $45, MET has since moved back below the level, which corresponds with its descending 100-day moving average -- a trendline that guided the shares lower at the tail-end of 2015. 

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