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Options Love This Insurer Ahead of Earnings

The bulls are putting their money "in good hands" Tuesday morning, betting on a rally in Allstate before its earning report two weeks from now.

OptionMonster's tracking systems detected the purchase of 5,000 August 25 calls for $1.10 against open interest of 2,333 contracts. The transaction accounted for more than 80 percent of the options activity in the name today.

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Options Trading School:

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ALL stock rose 1.36 percent to $24.57 in morning trading. The insurance stock has moved sideways for more than two months, holding support at $23 while making lower highs. It would need to climb at least 6 percent by expiration for the calls purchased today to turn a profit.

ALL is scheduled to release second-quarter earnings after the bell on Aug. 5. The company missed analysts' forecasts because of investment losses and lower premium income the last time it reported earnings on May 7.

Some investors may be more bullish now on the belief that higher stock prices since March bolstered results.

Call volume in the name exceeded puts by 13 to 1, reflecting the bullish sentiment.

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Insurance — Other Players:

Progressive

Genworth Financial

MerLife

Prudential Financial

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David Russell is a reporter and writer for OptionMonster.

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