The good times came to an end on Wednesday, as all three major indexes closed lower. The S&P 500 lost 1.2%, the Dow was down 0.9%, and the Nasdaq Composite was off 0.7%
Notably, the S&P 500 snapped a 9-day winning streak, during which it gained 3.5%. The index is up over 10% in 2026 and 26% over the past year.
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All of this good news despite a war that won’t end, high gas prices, and sticky inflation. It’s an amazing feat.
One of the industries that hasn’t done well in the past year is property & casualty insurance. The Invesco KBW Property & Casualty Insurance ETF (KBWP) is down 5.6% over the past 52 weeks.
The fourth-largest holding, Progressive (PGR), has performed much worse than the ETF, losing over 30% in the past 12 months. Yesterday, it hit a new 52-week and 2-year low of $189.20, down considerably from its March 1, 2025, all-time high of $292.99.
The P&C leader’s unusual options activity from yesterday’s trading suggests PGR stock could be nearing a bottom.
Here are three reasons why and how you can profit from it.
The PGR Option in Question
While Progressive’s share volume yesterday wasn’t much different than its 30-day average of 3.13 million, its options volume was; more than 2.6 times its 30-day average of 1,933, and the highest over the past three months.
The Jan. 15/2027 $230 call shown above was the stock’s only unusually active call or put option yesterday, with a Vol/OI (volume-to-open-interest) ratio of 23.78, the 29th highest.
More importantly, the call’s volume was 62% of yesterday’s total and 164% of the 30-day average. That speaks volumes.
The Put/Call Volume Ratio
The first reason PGR could be bottoming is yesterday’s Put/Call Volume Ratio. It was 0.31, meaning that for every put contract, there were 3.23 call contracts traded. That’s a bullish indicator.
In the past three months, there have only been three days when it was lower: 0.30 on Apr. 30, 0.28 on Apr. 28, and 0.23 on May 20. And, on each of those three days, the options volume was much lower than yesterday.
The fact that most of yesterday's volume was in the longer-dated Jan. 15/2027 expiration suggests deliberate positioning by institutional traders.
Today's open interest confirms this, which is up 3,684 as I write this in morning trading. This indicates that many of the trades were buy-to-open rather than closing short calls.
The Breadth of the Call Volume
I often get so fixated on large-volume trades that I forget that accumulated volume is, in fact, a more bullish indicator than one single block trade.
In the case of yesterday’s Jan. 15/2027, the call volume of 3,163 wasn’t one single order, but lots of 10+ trades. In fact, there were 146 trades of 10+ contracts, accounting for 78% of the call’s volume, with 59 of the 146 for 12 contracts each (708).
This situation almost certainly suggests that the trading is institutional in nature, using algorithmic buying to break up one or more block trades.
If we were talking about Nvidia (NVDA), I probably wouldn’t think anything of it. It trades up to 4 million contracts each day. It would take years for Progressive’s volume to match the world’s largest company.
Therefore, it’s clear something deliberate is taking place.
Is It Bullish?
That’s debatable.
At first, the 0.31 P/C volume ratio suggested that yesterday’s volume was bullish in nature. And, it still could be.
However, looking at the trade prices, I see that 139 of the 146 trades were at or below the bid price. Further, looking at the trade condition code for each, 88% are AUTO, which, combined with the number of trades with 12 contracts, suggests that one institution is using an algorithm to break up a single order.
So, it could be one of two things.
Either an institution is selling a whole bunch of Covered Calls for income against an existing long position, or selling them naked, which is very bearish, and comes with unlimited downside.
It makes more sense for this institution to be selling covered calls on its long position. It therefore holds Progressive as a good long-term investment, but doesn’t believe PGR’s share price can reach $230 over the next 7.5 months.
Has it PGR bottomed?
Yesterday’s options volume would suggest it’s awfully close. That’s not the same as it’s ready to go on a big run higher. There’s plenty of evidence that PGR could be dead money for the next 6-9 months.
In the long term, the institution(s) that own PGR will do just fine. And so will you.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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