Aflac surged after second-quarter results topped analysts' forecasts yesterday, prompting at least one big trader to write insurance on the stock.
OptionMonster's tracking systemsdetected heavy selling of the November 35 puts. The options were priced at $2.50 to $2.65 and volume totaled 5,144 contracts, almost four times open interest. Most of the activity occurred in a single minute, indicating activity by an institutional investor.
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Aflac rose 6.66 percent to $37.81 and is up 22 percent in the last month. The supplemental insurance company would have to fall below about $32.50 for the put seller to lose money on the position.
Other investors purchased calls to express a bullish sentiment toward the stock. The August 39 calls changed hands 2,031 times, rallying from $0.45 to a high of $1.20. The August 38 calls traded for $0.55 to $1.73. Volume exceeded open interest in both strikes.
Overall options activity in Aflac was more than three times average on the session.
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David Russell is a reporter and writer for OptionMonster.