Stock and option volume for Aetna (AET) and Cigna (CI) popped up on the radar yesterday. Aetna’s and Cigna’s stocks were both down around 1.5% yesterday, yet with a large amount of option activity. Not any significant news to go along with all of this activity either.
Cigna provides health care related products and operates in five segments: Health Care, Disability and Life, International Run-off Reinsurance and Miscellaneous. Aetna provides health care products primarily for the U.S. market. Aetna’s market segments include: Health Care, Group Insurance, and Large Case Pensions.
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Aetna saw significant activity in the November 31 call options. These options were out-of-the-money as the price of Aetna closed at $27.83.
Cigna also saw significant activity in the November 31 call options. These options were out-of-the-money with the price of Cigna closing at $28.09. Cigna’s stock price has performed well over the last nine months, but Aetna’s has been down over the last year with its stock price stuck in a trading range between $20 and $35:
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Both Cigna and Aetna have attractive covered call investing positions available today with a Cigna covered calls position for call option October 29 (CIJN) having a %if assigned potential return of 4.9% A covered call investing position for Aetna is available for October expiration for call option October 28 (AETJL) with a %if unchanged potential return of 3.9%.
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To enter the covered calls positions for a stock portfolio option investors would purchase the stocks in multiples of 100 shares and sell one call option for each 100 shares of stock purchased.
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[tags] option volume, health care, Disability and Life, Group Insurance, out-of-the-money, AET, Aetna Inc., CI, CIGNA Corp. [/tags]