Market News

October 18, 2016  Tue 5:47 AM CT

A large position is betting that upside potential will be limited in Wells Fargo for the rest of the year.

optionMONSTER's monitoring programs show that 15,078 October 46 calls were purchased for $0.04 while 15,078 December 46 calls were sold for $0.75 yesterday. Volume was below open interest in the October contracts, which expire at the end of this week, indicating that a trader s rolling a short-call position forward two months.

Short calls generate income and lock in the price where a stock must be sold. The trade is usually done in conjunction with long shares in a covered-call strategy, reflecting a belief that gains will be limited through expiration. (See our Education section)

WFC fell 0.47 percent to $44.50 yesterday and is down 7 percent in the last three months. The bank's next quarterly report is scheduled for pre-market hours on Oct. 14.

Overall option volume was about average in WFC yesterday.

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