Sell-Off Draws Option Bulls into Invesco
By: Pete Najarian | "Fast Money" Contributor
Option traders are looking for a rebound in Invesco Mortgage Capital, which has taken a significant hit this quarter.
Buyers were focused on the November 14 contracts yesterday, initially paying $0.80 but then $0.90 as the stock pushed higher, according to OptionMonster's real-time tracking systems. More than 6,800 of those calls traded, 50 times the open interest when the session began, indicating that these are new positions.
IVR rose 0.35 percent to $14.18 yesterday but was above $20 back in July. The company, which finances and manages mortgage loans and mortgage-backed securities, recently issued a secondary stock offering to address losses.
Overall more than 7,000 calls traded at all IVR strikes versus 679 puts in yesterday's session, and total volume was triple its daily average. The activity followed call selling in Invesco's November 15 contracts last week, a bet that upside would be limited.
Opposing Opinion: No Buying Opportunity in Sell-Off
—Najarian has no positions in IVR.- More Options Tips from Pete Najarian
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.
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