Market News

December 13, 2016  Tue 7:34 AM CT

Bank of New York Mellon has been ripping higher for months along with other financial stocks, but a large trade apparently sees a limit to further gains.

Our monitoring systems detected the sale of 23,158 January 47 calls in one print for $2.35 yesterday. Volume was well above the strike's open interest of 4,889 contracts, showing that this is a new position.

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)

BK fell 0.82 percent to $48.22 yesterday but is up 17 percent in the last three months. The bank reported bullish results on Oct. 20 and is expected to announce its next quarterly numbers in pre-market hours on Jan. 19.

Overall option volume was 9 times greater than average in the name yesterday.

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