Why One Bull is Staying in MBIA

MBIA has started to move, and one investor apparently expects more gains next month.

optionMONSTER’s Heat Seeker monitoring program detected the purchase of 7,500 March 13 calls for $0.69 and the sale of a similar number of February 13s for $0.17. Volume was below previous open interest in the nearer-dated contracts, so it appears that an existing position was closed and rolled forward in time.

Long calls lock in the price where a stock can be purchased, providing relatively inexpensive upside exposure. Capital can be moved from one contract to another as time progresses, keeping investors long with much less downside risk than would be the case owning shares.

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