Traders sought options contracts heavily on both Citibank (NYSE: C) and American International Group (NYSE: AIG) as both companies stock prices jumped during mid-day trading on Tuesday.
Much of the activity related to Citibank and AIG was positive as investors purchased large swaths of call options, speculating that both companies will see even higher stock prices during the month of April. Investors in Citibank took up 1.4 million in call options that would allow them to buy the bank’s stock and there were also 285,000 put options that would allow the bank to sell it.
“It’s like everyone woke up this morning and realized that Citigroup is a great stock to own,” said Steve Sosnick, an equity risk manager at Interactive Brokers’ Timber Hill to the Wall Street Journal. “Call it risk tolerance or speculative fever, either one can be used to explain what we see today.”
Some of the largest transactions on Citibank’s stock today took place in longer-dated April $4.00 calls. During the morning, a small group of traders ordered $4.00 April calls, paying $0.06 for the privilege. The contracts nearly tripled in value throughout the trading day and are now selling for $0.16.
Meanwhile, AIG gained momentum during the second half of the trading day as the stock make an abrupt positive turn and gathered some amount of momentum. After the upswing, activity on AIG options jumped to five times their normal rate, with investors buying 223,000 call options and 98,000 put options.
The majority of the trading in AIG took place in March $35 calls, whose value went up from $01.5 at market open to $0.90 at the end of the day.
