Fidelity National Financial, Inc (FNF) is a provider of mortgage, title insurance services and other diversified services. The company’s stock is currently trading around $27.85 in a 52 week range of $21.04-$28.09. The stock has been performing well this year adding nearly 19% to share prices year to date. This morning we have seen some bullish option activity in FNF that indicates traders expect the stock to head higher through March of next year. Early in today’s trading session a trader bought 6,000 Mar 28 calls for $1.45. This block represents volume in FNF 4.5 times the average daily option volume. We take this as a very bullish signal. The stock is also trading well on a chart and has been trending higher since the company reported quarterly earnings on October 25th. Shares are also trading well above the Ichimoku Cloud with a strongly upward sloping future cloud indicating there can be more upside in FNF. With stock below its 52 week highs we believe the strong chart and unusual option activity in FNF sets up well for a long term bullish trade. We will look at out of the money call spreads in order to reduce initial capital outlay while preserving a great reward potential.
Trade: Buying the FNF Mar 28-31 Call Spread for $1.00
Risk: $100 per 1 lot
Reward: $200 per 1 lot
Breakeven: $29.00
