Unusual Options Activity: MetLife (MET)

Traders bet on rally by March.

On Thursday, over 5,000 contracts traded on March 2020 $50 call options on MetLife (MET). With a prior open interest of 224 contracts, the volume was 22 times the prior open interest, making for one of the most active options trades of the day.

With shares around $44, the bet is on a $6 upside by March, about 13.4 percent higher from here, in the next 203 days before expiration.

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  • MetLife provides insurance, annuities, employee benefits, and runs an asset management business for individuals and companies around the world.

    Action to take: Insurance companies tend to have stable, long-term growth thanks to their policy of receiving capital up front that can be reinvested while waiting to be paid out as claims. That’s a fantastic business for any investor, and a 13 percent rally in shares from here by March seems easily possible from here.

    Speculators should also look at the March $50 calls, which trade for around $1.00, or $100 for the full contract, and could move higher than shares on a percentage basis in the next few months.

    Long-term investors may want to consider shares, given the long-term advantages insurance companies hold, as well as the company’s 4 percent dividend yield at current prices. MetLife just raised its annual dividend from $1.70 to $1.76.