Today’s tickers: MET, ARMH & LGF
MET – MetLife, Inc. – Shares in insurance, annuities and employee benefits provider, MetLife, Inc., are popping on Tuesday after the company raised its quarterly dividend for the first time since 2007, increasing the payout to $0.275 from $0.185 a share. MET shares rallied as much as 6.9% in the early going to $38.27, the highest level in three weeks. Traders positioning for continued gains in the price of the underlying snapped up weekly call options on MetLife this morning, driving fresh interest in several striking prices. Of the weekly calls available, the Apr 26 ’13 $38.5 strike calls attracted the most volume with upwards of 1,500 contracts in play as of midday in New York. It looks like most of the $38.5 strike calls were purchased at an average premium of $0.16 apiece, thus positioning buyers to profit should shares in MET settle above the average breakeven price of $38.66. Traders also appear to be buying up calls at the Apr 26 ’13 $37.5 and $38 strikes today. Meanwhile, options players who purchased upside calls on MetLife yesterday are seeing big gains today. Traders yesterday picked up around 1,200 calls at the Apr 26 ’13 $35 strike for an average premium of $0.86 each, and purchased around 1,600 calls at the higher $36 strike for an average premium of $0.26 apiece. These contracts today tout price tags of $3.10 and $2.09 each, respectively, as of the time of this writing, resulting in substantial overnight gains.
ARMH – ARM Holdings Plc – Bullish activity in options on British semiconductor intellectual property company, ARM Holdings, looks for shares in the name to extend gains in the near term. The stock is up 13% at $45.50, the highest level in more than a decade, after the company reported first-quarter sales that beat analyst expectations ahead of the opening bell this morning. Traders anticipating further gains in the stock price during the next couple of months picked up around 570 calls at the Jun $45 strike for an average premium of $1.40 per contract. Call buyers may profit at expiration in the event that ARMH shares rise 2.0% over the current price of $45.50 to surpass the average breakeven point at $46.40.
LGF – Lionsgate Entertainment Corp. – The global entertainment company popped up on our scanners this morning due to heavy trading traffic in June expiration put contracts. The spike in put activity on LGF suggests some traders may be positioning for a pull back in the stock or securing downside protection on the name ahead of Lionsgate’s fourth-quarter earnings report after the close on May 30th. Shares in LGF are up 0.35% at present to stand at $23.77 as of 12:35 p.m. ET. The stock has increased roughly 104% since this time last year. Options volume on Liongate today, up substantially over the stock’s average daily level of around 3,100 lots, is concentrated in the Jun $23 puts. It looks like traders exchanged more than 22,000 puts at that strike during the first half of the trading session against open interest of just 518 contracts. It looks like most of the volume was purchased at an average premium of $1.14 apiece, indicating downside protection – or profits – kick in given an 8.0% decline in the price of the underlying to $21.86 by June expiration.
Caitlin Duffy
Equity Options Analyst
