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Options In Play On Genworth Financial Inc (GNW) Eye Further Upside

Genworth Financial Inc (NYSE:GNW) – Bursts of activity in Genworth Financial Inc (NYSE:GNW) call options in the early going on Wednesday appears to be the work of one or more traders betting the price of the underlying stock pushes toward multi-year highs during the next several months. Shares in the insurer kicked off the trading session in rally mode, initially rising 1.2% to a near two-year high of $11.02, before reversing course to trade down 1.85% on the day at $10.69 as of 11:15 a.m. ET. The stock was cut to ‘Neutral’ from ‘Buy’ at BTIG today. Shares in Genworth Financial Inc (NYSE:GNW) are up roughly 170% off the 52-week low of $4.06 set back in August of 2012. Options volume in Genworth Financial Inc (NYSE:GNW) is heaviest out at the Sep $13 strike, where 5,000 calls changed hands against open interest of 472 contracts. It looks like most of the volume was purchased for an average premium of $0.42 each. Buyers of these contracts stand ready to profit at September expiration should shares in Genworth Financial Inc (NYSE:GNW) rally 25% over the current price of $10.69 to top the average breakeven point at $13.42. The Sep $12 strike calls are also active today, with around 1,000 lots purchased at an average premium of $0.69 apiece just before 10:00 a.m. ET this morning. Time and sales data suggests roughly 1,000 of the Sep $12 strike calls were purchased on Tuesday morning at around the same time for a premium of $0.62 each.

Genworth Financial Inc (NYSE:GNW)

Macy’s, Inc. (NYSE:M) – Shares in department store operator, Macy’s, Inc. (NYSE:M), are up 1.3% today at a new all-time high of $47.12. Options changing hands on the retailer today indicate some strategists are positioning for the price of the underlying to extend gains in the near term. One trader appears to be rolling a bullish position in front month calls up to a higher striking price ahead of the company’s first-quarter earnings report next Wednesday before the open. The options player appears to have sold roughly 1,000 calls at the May $46 strike at a premium of $1.62 in order to purchase around the same number of calls at the higher May $48 strike for an average premium of $0.48 each. The bullish trade looks for shares in Macy’s to continue rallying to fresh record highs. Meanwhile, the most actively traded options on Macy’s, Inc. (NYSE:M) as measured by volume, are the Jan 2014 $37 puts. It looks like one trader sold around 3,000 contracts at a premium of $1.05 each versus open interest of 4,225 contracts. The put seller could be selling to close an existing bearish or protective position, or initiating the strategy that results in maximum gains of $1.05 per contract as long as the stock exceeds $37.00 at expiration next year.