OptionsHouse

Options Trading News

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.
Share this article with your friends


Related Stories

WFC

Put sale counts on floor in Wells Fargo

January 8, 2016

The bank is scheduled to report earnings a week from today, and traders apparently believe that downside potential will be limited through mid-February.

OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »