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Option Bulls Bet on MetLife Longevity

MetLife

MetLife sign in New York City.
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MetLife sign in New York City.

has peeled back from its March highs, but now buyers are nibbling again.

Activity lit up early yesterday in the June 32 calls, and more than 6,100 of the contracts traded by the end of the session. The largest chunk priced for $1.14, and others followed from $1.19 up to $1.28, according to OptionMonster’s real-time tracking systems.

MetLife

Those callslock in the price investors must pay to own shares in the company, which provides insurance, annuities, and employee benefit programs in the U.S., Japan, Latin America, the Asia Pacific, Europe, and the Middle East. They can generate decent leverage from a relatively small appreciation in the stock price, but can expire worthless if it doesn’t move.

MetLife shares dropped 2.47 percent close at $30.85 yesterday. The insurance company has steadily declined since peaking more than $39 two months ago, even though its yield is strong and valuation reasonably cheap.

More than 26,000 options traded overall in the name yesterday, more than twice the average amount.

—Najarian has no positions in MET.


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Pete Najarianis a professional investor, CNBC contributor, regular co-host of CNBC’s “Fast Money ” and co-founder ofOptionMonster.com .

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