This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Manulife Bulls Get Active Before Earnings

By Pete Najarian of OptionMonster

NEW YORK -- Manulife  Financial (MFC) reports earnings next week and the options paper heated up Tuesday.

Activity focused solely in November, with traders buying the 17 calls for 70 cents and selling the 18s for 10 cents. Chunks of 2,500 contracts traded in each.

Owning calls locks in where traders can buy the stock, while selling calls will force them to unload shares if the strike price is reached. Combining the two controls a move between $17 and $18. They'll collect $1 if that higher price is reached, a 67% gain on their 60-cent cost. 

Manulife rose 1.45% to $17.49. It's the largest life insurance company in Canada by market cap. The company also operates in the United States and Eastern Asia. The U.S. accounts for 43% its earnings, while Canada contributes 28% and 39% comes from Asia.

The stock will have to reach near and through its 52-week highs for Tuesday's spread to expand all the way, and the volumes suggests there is a belief that level may get tested.

In additional to the spread, more than 1,000 of the November 17s were bought naked, mostly for 60 cents.

Calls outnumbered puts by 9 to 1, so it was definitely a bullish session. Total volume was 16 times greater than average.

Najarian owns MFC calls.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%
YHOO $36.59 -0.97%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports