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)

by Josh Selway

Published on Mar 30, 2016 at 11:36 AM

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. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!


  
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Google Postpones Android Reveal, "Now is Not the Time to Celebrate"
"Now is not the time to celebrate," Google said in a message on its website
ZNGA Zooms to 8-Year High on Billion-Dollar Deal
ZNGA is planning to buy Peak for $1.8 billion
Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....