Wells Fargo's Large Put Trade
Wells Fargo (NYSE: WFC) has been steadily moving higher over the past month and is now approaching its 52-week high of $31.53 (WFC is currently trading $30.43, up 0.495 on the day). Most analysts are bullish on the name and so am I; if housing comes back even a little, Wells Fargo should benefit exponentially given that they were a more prudent lender in the first place.
One trader seems to be taking the other side of that trade and is buying a boatload of puts in April. The April $23 puts were bought on the offer in a 28,000 contract block for $0.08 just a short while ago. This volume eclipses open interest twofold and is quite baffling, frankly. The stock would have to make a very large move lower or volatility increase dramatically for this put to be worth anything, neither of which seems plausible within the next month.
This may be part of some much larger hedging play that is being implemented over a period of days, but in all honestly this trade, whatever it may be, looks like dead money.
