Traders Go Bottom Fishing in Manulife

Manulife Financial is not a name seen often, but it lit up OptionMonster's screening systems on Friday.

Almost 2,000 March 12 calls were purchased on the beaten-down life insurer, which is attempting to bounce at its lowest price since March 2009. Investors paid $0.25 and $0.30, and volume was quadruple the open interest in the strike.

Manulife fell 0.38 percent to $10.40 on Friday and has lost more than one-third of its value in the last six months. The declines have been slowing since the summer, however, and valuations could attract some investors: It trades at less than book value and has a 5 percent dividend yield.

Those long callslock in an entry price on the stock, so they could double or triple if Manulife rallies to $12 by in the next few months. But they will also expire worthless if the stock fails to move.

Given the apparent cheapness of the stock, and how long they have for the calls to pay off, Friday's trades seem to be an inexpensive bet that Manulife will rebound in coming months.

Overall option volume was seven times greater than average, with calls accounting for more than two-thirds of the activity.

—Russell has no positions in MFC.

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David Russell is a reporter and writer for OptionMonster.