By David Russell
On Friday, optionMONSTER's Heat Seeker tracking system detected heavy activity in the October and November 5 calls, with blocks of 7,737 trading in each. The Octobers were sold for $0.80 against open interest and the Novembers were bought for $1, resulting in a net cost of $0.20.
The transaction, which occurred in the final minute of the session, indicates that an existing long position was rolled from one contract to the other. As a result, the investor now has an additional month to profit from upside in the Indiana-based insurance company.
CNO has consistently reported strong earnings in the last two years but lagged recently amid weakness in the broader financial sector. The company provides services such as health insurance, annuities, and life insurance.
The stock rose 1.94 percent to $5.79 on Friday, so those calls are in the money. That will let the investor leverage small moves in the share price while protecting him or her against time decay. (See our Education section)
The position has been open for several months, last appearing on the Heat Seeker in June. The company will post earnings results before the bell on Oct. 26.
Overall option volume was 19 times greater than average in Friday's session, with calls accounting for all the activity.