What's With Ambac's Weird Options Action?
Ambac Financial Group is seeing unusual options activity Friday, as its shares rise 17 percent on the day.
The stock move is only $0.19, as ABK is at $1.31 in midday trading after struggling to stay above the $1 mark for much of this week.
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The options today are active at the March 2.5 strike, where a chunk of nearly 20,000 calls were bought for $0.15 against minimal open interest of 107 contracts. Those calls are now going for $0.20 to $0.25, according to OptionMonster's proprietary systems, which track unusual options trading in real time.
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The action got our attention because it followed earlier activity we cited on Jan. 28, when the May 2.5 calls were trading on heavy volume as the stock traded at $1.23. Those calls, which went for $0.25 and $0.30 back then, are up a tad to $0.35 and $0.40.
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Ambak, which insures bonds, made headlines earlier this week for granting $3 million in cash bonuses to four executives after its stock had fallen 95 percent in 2008. The company is scheduled to release its fourth-quarter earnings on Feb. 25 before the market opens.
I have positions in ABK.
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