Today’s market selloff isn’t stopping the smart money from buying up calls in select companies. One of the biggest call buys (multiple) was seen in American International Group (AIG).
One trader just gobbled up 19,621 January 2016 $60 calls, paying $3.25 at the ask to get them. That seems like a bargain to us, so we’re in. That trade was worth $6,375,000. That’s a BIG options bet. The January 2016 $60 calls have seen a total of over 42,000 contracts traded today.
American International Group (AIG) is currently trading down 28 cents to $52.37 as of 3:45 pm. Volume is much heavier than average at over 20 million shares. AIG has a 52 week high of $56.00 and a 52 week low of $45.94. AIG is trading at a PE of just over 8 times earnings. And earnings just went up 13% this quarter.
Clearly several traders think this stock is a bargain. This isn’t your typical earnings leak or analyst upgrade leak play. This is a value play. Of course given the choppy markets this could head south before it heads north.
A total of 28 analysts currently cover American International Group (AIG) with an average rating of “overweight” and an average price target of $59.35. I would suspect that given their good earnings report, there will be several upgrades and price target increases coming very soon for AIG that can only help send this stock higher.
We are locked and loaded in the Jan 2016 $60 calls, and will average down if or when the opportunity arises.