By Chris McKhann
Traders are buying puts on Comerica (CMA) even as shares push to 52-week highs.
CMA trades at $42.37, up 2.49 percent on the day and roughly 300 percent above the 2009 lows. The regional bank reports earnings come in next week, and traders apparently think that there will be some real volatility in the shares.
More than 10,000 of the CMA May 42.50 puts have traded. The largest block of 9,900 was bought for $2.15 at more than five times the open interest at that strike. This volume is also three times the total average daily options volume for CMA.
Minutes later, a trader bought 500,000 shares of CMA for $42.10. This trade therefore looks like a hedged traded that will profit if shares move higher or lower as long as there is volatility. The 30-day historical volatility is down at 20 percent, a new 52-week low.
Disclosure: No positions