AIG is having an incredible day in the market today, and for good reason. Billionaire activist investor, Carl Icahn made the decision to raise his stake in the company in a big way. Today, we'll talk about why binary options traders should watch the moves of activist investors, the increase in AIG we saw from Carl Icahn, how the market reacted to the news, and what we can expect to see from AIG moving forward. So, let's get right to it…
Why Binary Options Traders Should Watch Activist Investors
Activist investors are investors that purchase large stakes in companies in order to have a meaningful say in how the company is ran. Essentially, these are billionaire investors that find companies with huge potential. Then, they make investments in those companies and work to ensure that they meet their potential. Generally, these investments are made in times of struggle. As a result, we tend to see quite a bit of volatility in the stocks activist investors put money into, leading to several opportunities over short time spans for binary options traders.
Carl Icahn Raises His Stake In AIG
Carl Icahn is a well respected activist investor. In fact, I would argue that he has done more for corporations and the US economy than anyone since Ronald Reagan. Well, he has made the decision to invest even more in AIG. In fact Icahn increased his stake int eh company by 5.2%. This brings his total number of AIG shares owned to 44.4 million, which makes his stake in the insurance company about 4%.
The reason Icahn raised his stake in the company is relatively simple. He has made his opinion public that AIG should split into three separate publicly traded companies. However, so far, AIG has ignored these suggestions and continues to run forward as a single corporation. However, Icahn's large investment in the company, gives him more of a say, and this may give him the leverage he needs in order to pressure AIG into the split.
How The Market Reacted To The News
As binary options traders, we know that the news moves the market. The fact that Carl Icahn has purchased more of the company is incredibly good news as he will continue to work to push AIG in the right direction. So naturally, we're seeing gains in the value of the stock today. Currently (2:25), AIG is trading at $56.37 per share after a gain of $0.97 per share or 1.75% thus far today.
What We Can Expect To See Moving Forward
At the moment, AIG is having an incredibly rough time. However, with Icahn in the company's corner, we are likely to see some good news. As a result, we're most likely going to see quite a bit of volatility. So, get prepared for roller coaster like movement on the stock.
How Binary Options Traders Can Take Advantage Of The Trends
As binary options traders, our job is to spot trends and make trades to take advantage of those trends. In the case of AIG, this is going to be relatively simple. We are likely to see incredible volatility, but it's not likely to leave the range between resistance and support any time soon. So, watch the stock closely. When the value of AIG nears support, purchase call options to take advantage of the resulting upward movement, and when it nears resistance, purchase put options.
What Do You Think?
Where do you think AIG is headed moving forward and why? Let us know your opinion in the comments below!
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