Risk Reversal Trades on Assured Guaranty LTD (AGO)

Shares of Assured Guaranty LTD AGO are higher on the session by 2.66%, currently trading at $13.60. The stock has been trading lower after a sharp sell off in May. Options traders are betting that the stock could rally. The July $12.50 put was sold 1,100 times, on the bid, for $0.40 and the July $14.00 call was purchased, on the offer, 1,100 times for $0.60. This is known as a risk reversal and represents a trader using volatility skew to get long shares. Call volume is now running at 3.2x the daily average. Assured Guaranty Ltd. is a holding company that provides, through its operating subsidiaries, credit protection products to the public finance, infrastructure and structured finance markets in the United States, as well as internationally. AGO operates in four segments: financial guaranty direct, financial guaranty reinsurance, mortgage guaranty, and other.