Wells Fargo draws odd call strategy
Chris McKhann | email@example.com
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.