Huge Call Trade in E*Trade

E*Trade Financial Corporation (NASDAQ: ETFC), the online broker saddled with a large amount of sketchy home loans, is seeing a large call transaction this afternoon. The Jan 2011 $2.50 calls were purchased on the offer 45,000 times for a price of $0.17 a short while ago. The volume does not exceed open interest, so it is impossible to know for sure whether the calls were new positioning or closing transactions. It is very likely that this is a closing transaction given that the E*Trade Leap options were notoriously sold heavily back in 2009 by very large players (Citadel??) hundreds of thousands of times across many strikes.

It appears that with the recent pullback in E*Trade, currently trading $1.43 whereas it was trading $1.84 just three weeks ago, a large investor is taking the opportunity to cash out of some hedges. This gives a slightly bullish tone to the stock; couple this with the in line earnings report issued a week ago and I like the stock. E*Trade is always one of the first stocks to give up the gusto when the market is rolling over, as well as catch a bid when stabilization occurs; I would buy the stock right here.