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New Calls

None today.
 

New Puts

Everest Re Group - RE - close: 97.93 change: -1.07 stop: 102.01

Company Description:
Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the U.S. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the U.S. (source: company press release or website)

Why We Like It:
Investors are still uncertain about the financials and the insurance stocks are sinking with a bearish trend of lower highs. The S&P IUX insurance index just produced a new lower high today. Fueling the move was weakness in AIG, which lost 4% ahead of its earnings report tonight. AIG's earnings were negative and the stock is trading down after hours, which should put more pressure on insurance and financial sectors tomorrow. We think RE could be a good way to play weakness in the insurance sector. RE has a similar pattern of lower highs and looks ready to roll over into a new leg down. We're suggesting put positions now. If you want to see more momentum then wait for a drop under $96.90. We are setting two quick targets. Our first, conservative target is $93.50. Our second, more aggressive target is the $91.00-90.00 zone. We're suggesting a stop loss at $102.01 but more conservative traders might be able to get away with a stop around $100.51. FYI: The P&F chart is bearish with a $74 target.

Suggested Options:
We are suggesting the March or April puts.

BUY PUT MAR 100.0 RE-OT open interest=118 current ask $3.70
BUY PUT MAR 95.00 RE-OS open interest=411 current ask $1.35

BUY PUT APR 100.0 RE-PT open interest=383 current ask $4.80
BUY PUT APR 95.00 RE-PS open interest=244 current ask $2.55

Picked on February 28 at $ 97.93
Change since picked: + 0.00
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 487 thousand
 

New Strangles

None today.
 

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