Voya Financial has rallied in the last month, handing large profits to upside option traders.
On Dec. 21, Investitute’s tracking systems flagged the purchase of 3,300 January $50 calls for $1.35 to $3.05 with shares at $52.02. Volume was well above the strike’s open interest, indicating that this was fresh buying.
Those calls traded for $4.30 today, at the end of today’s session, more than 3 times their original purchase price. The stock rose just 3.1 percent in the same time period, illustrating the kind of leverage that can be achieved through options. It is the second winning trade in Voya posted on Investitute in the last month.
Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
VOYA was up 0.41 percent to $53.68 today. The financial firm rose sharply last week after reports that AIG had considered a $10 billion offer to buy the company.