Market Overview

Ameriprise Financial Appears Ready to Break Out


Shares of Ameriprise Financial (NYSE: AMP) are trading lower on the session by 0.62%, at $54.97. The touched an intra-day low of $54.53 a short time ago and has been rallying back toward unchanged.

Ameriprise Financial has been rolling higher over the past three months. It recently tested and held the 50-day moving average before working higher. Shares have been consolidating above the 20-day moving average for the past two weeks and now appear ready to break higher.

A move above the January 23rd high of $55.61 would confirm a break out.

Options traders are hinting at higher prices for Ameriprise Financial as well. Calls have vastly outpaced put volume today, by 47 to 1. The strike seeing the heaviest action is the March 2012 $60.00 call, which has traded 1,890 times on open interest of only 238 contracts. The Mar2012 $55.00 call also traded 581 times on 1,703 contracts.

Note that AMP has only 1.03% short interest, so traders are betting on pure long volume to carry the name higher.

Given the relative spread between overall implied and historical volatilities (27% and 41%, respectively), long options appear the best way to play an upside thesis. The above referenced Mar2012 $60 call is trading at 29.53% vol, while the Mar2012 $55 carries an only slightly higher premium, at $30.66% vol.

Ameriprise Financial, Inc. is a holding company primarily engaged in business through its subsidiaries. It provides financial planning, and products and services. Ameriprise Financial operates in five segments: Advice & Wealth Management, Asset Management, Annuities, Protection and Corporate & Other.

Posted-In: Long Ideas Technicals Options Markets Trading Ideas


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