Call selling targets Itau Unibanco

optionMONSTER

A large trader apparently believes that further gains will be limited in Brazilian banking company Itau Unibanco.

optionMONSTER systems detected the sale of 5,000 September 16 calls for the bid price of $0.30 yesterday. This is clearly a new position, as its volume was twice the total daily average in the name and more than 5 times its previous open interest.

These calls may have been sold naked, which would have an initial bearish bias but still have the potential to profit with the stock at or below $16.30 upon expiration in mid-September. The contracts could also have been traded against an existing long position in a covered-call position , which would be bullish but only up to the strike price.  (See our Education section)

ITUB rose 3.12 percent to $13.53 yesterday, just below its 200-day moving average. The bank has encountered resistance at $13.50 going back to November. Shares were down at support at $12 at the start of this month and have not been above $16 since last May.

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