One investor apparently thinks that Banco Bradesco deserves more time to rally.
optionMONSTER's Heat Seeker monitoring program detected the purchase of 5,000 March 19 calls for $0.20 and the sale of an equal number of December 18 calls for $0.07. Volume was below open interest in the December contracts, indicating that an existing trade was rolled forward in time.
The investor now has an additional three months to benefit from upside in the Brazilian lender, paying $0.13 to adjust the position. Without that move, the trader would have seen premiums dwindle at an accelerating pace in the December contracts as expiration approaches in three weeks.
BBD is up 1.97 percent to $16.60 in afternoon trading. The stock has been fluctuating in a range for the last year and is now attempting to get above its 200-day moving average. If it succeeds, some chart watchers may consider it the beginning of a bullish turnaround.
Total option volume is 7 times greater than average so far today, with calls accounting for virtually all the activity.
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What's behind Bradesco put selling
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The Brazilian lender had been trading sideways all year but gapped lower along with other domestic banks when the country reported weak economic numbers in late May.
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