Tuesday August 25, 09:55 PM
STOCKS NEWS US-Option players in reinsurer XL eye gains
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1635 ET 25Aug2009 Reinsurer XL players hope to catch gains
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Shares of reinsurer XL Capital (NYSE: XL - news) rose 3.18 percent to $16.85. It
traded as low as $2.56 early in 2009. Some hoping to catch extended gains in
the months ahead, favored out-of-the-money call options in the October
contract. Earlier in the session, almost 7,000 Oct $17.50 calls traded,
compared with existing positions held by investors of 3,107. While some sellers
are possibly closing positions in those calls, 'it also appears that some
investors are buying premium in anticipation of additional upside in XL,' said
WhatsTrading.com option strategist Frederic Ruffy. On the International
Securities Exchange, where more than half of the calls traded, sentiment data
point to 86 percent (4,429 contracts) opening customer call buys, he said.
Investors' appetite for options sent the stock's average implied volatility to
62.5 percent from about less than 59 percent the previous session.
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