By Jud Pyle, CFA, chief investment strategist for the Options News NetworkShares of Unum Group ( UNM) were up over 1% Friday at $11.02. The shares of the life insurance company are now up more than 37% since hitting a 52-week-low close of $7.99 on March 5. Life insurers have been huge beneficiaries of this rally of the past week, but shares are still well below the levels of last December. Today we saw some call-selling activity in UNM that is a microcosm of how some investors are using this recent rally to sell calls, which is helping to drive down the CBOE Volatility Index (VIX) as well.
This call activity does not mean that investors should run out and sell their shares. To the contrary, this could likely be one large investor who is willing to hold his shares, but believes that if the stock gets to $15 at June expiration, he would be willing to sell by having them called away. Here at $11.02, the investor is willing to hold the shares, suggesting that at least UNM could hold these levels. Jud Pyle is the chief investment strategist for Options News Network (www.ONN.tv) and the portfolio manager of TheStreet.com Options Alerts. Click here for a free trial for Options Alerts. Mr. Pyle writes regularly about options investing for TheStreet.com.