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Wells Fargo draws huge upside trade

Chris McKhann (chris.mckhann@optionmonster.com)

A huge call trade tops today's option activity in Wells Fargo as the bank climbs to four-year highs.

optionMONSTER's Heat Seeker system detected the sale of 38,900 April 40 calls for $0.11 under the previous open interest of 41,954 contracts and, at the same time, the purchase of 38,900 May 40 calls for the ask price of $0.40 with no open interest at that strike.

This could be a new calendar spread looking for WFC to be right around $40 at the first expiration. This could also be a roll, with the trader selling to close the April calls and moving the position out to May to get a bit more exposure and more time for the upside strategy to work. (See our Education section)

WFC is up 2.38 percent to trade at $37.85, its highest level since October 2008. Shares bounced off support at $32 in mid-November.

More than 124,000 WFC options have changed hands so far today, already almost 4 times its daily average in the last month. 

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