Lincoln National Call Buyers See Upside

By David Russell, reporter at OptionMonster

OptionMonster's tracking program detected heavy buying of the November 26 calls, with institutional-sized trades for 95 cents to $1.05. Volume in the strike rose to 5,578 against open interest of 4,938 contracts.

The stock fell 1.46% to $23.56 on Tuesday. The stock of the annuity company has been falling since early October after rallying more than fivefold over the previous seven months.

The shares must climb about 14% by November expiration for the calls to turn a profit. The investor may be betting a good earnings report will drive the stock back near its recent high of $28.10. The company's adjusted earnings beat analysts' forecasts the last time it issued results on July 29.

Other investors sold the January 29 calls for $1 early in the session, following active buying of the shares. The activity probably resulted from investors selling covered calls to earn premium and reduce their cost basis in the stock. The calls changed hands 3,070 times, more than five times open interest.

Overall options volume was almost twice the average level Tuesday, and calls accounted for 88% of the trades.

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