Short-term Protection Purchased on Wells Fargo (WFC)

Shares of Wells Fargo & Company (WFC) are trading higher on the session by 1.59%, at $35.08. The stock has been ticking higher over the past four months after a successful test and hold of the 200-day moving average.

Wells Fargo touched a 52-week high of $36.60 on September 14^th, however, one options trader is buying protection on the name today.

Shortly after the opening bell, the October 5w $34.50 put was purchased 2,584 times, on the offer, for $0.18-0.20. The trader came back minutes later and purchased another 1,594 puts, on the offer, for $0.19-0.21.

Total volume on the strike is 4,182 contracts, which eclipses current open interest of 604; this indicates new positioning on the name.

Current near-term implied and historical volatility is registering 21% and 22%, respectively, just off of yearly lows of 17% and 6%. At an average of $0.20, the Oct 5w $34.50 put traded at 24% vol.

Wells Fargo & Company is a bank holding company. It has three operating segments: Community Banking Wholesale Banking and Wealth, Brokerage and Retirement. 

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.