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December 26, 2012  Wed 8:58 AM CT

WFC: SEE CHART GET CHAIN FIND STRATEGIES
Wells Fargo is seeing an unusual call trade this morning.

A trader sold 4,590 January 22.50 calls for the bid price of $11.90 against open interest of 5,387 contracts, according to optionMONSTER systems. At the same time, he or she bought the same number of the January 2015 25 calls for the ask price of $10.20 against open interest of 1,434.

This could be a new diagonal spread but is more likely a a roll, with the trader selling to close the earlier position, which is deep in the money and expiring in less than month, and buying calls with two years left to trade. (See our Education section)

WFC is trading at $34.43, up a penny on the day. The banking stock bounced off support around $31.50 a month ago and last week filled a down gap from early October, but it ran into resistance at $35.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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