Why Wells Fargo May Spike Ahead Of Earnings Season

On CNBC's "Options Action," Tony Zhang said there was a “massive roll” in Wells Fargo & Co WFC.

The stock traded more than three times its average daily volume on Wednesday. “Currently, the options are implying about a 3.8% [rise] going into earnings this week,” Zhang said. 

There was a buyer of 27,720 of the February 57.5 calls at an average price of $1.54 per contract. This accounted for almost 20% of the total contracts traded Wednesday, Zhang said. They sold an old contract for $7.7 million and invested $4.6 million into the new trade, he added. This trader expects shares of Wells Fargo to spike at least 4.5% by February expiration.

The buyer also bought 9,500 of the February 62.5 calls at an average price of 37 cents per contract, Zhang mentioned. This bets the stock will be 11% higher by February expiration, he added.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date of Trade
ticker
Put/Call
Strike Price
DTE
Sentiment
Posted In: Long IdeasOptionsMarketsMediaTrading IdeasCNBCTony Zhang
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!