Buy Call WFC

April 23, 2024
Buy the Wells Fargo (WFC) December 62.5 Calls (exp. 12/20) for $6 or less.

Since earnings season kicked off for Financial stocks, it has been clear that Wells Fargo (WFC) has been the leader in the space as the stock has made new highs seemingly every day, and option activity has been overwhelmingly bullish throughout.

And encouragingly, in terms of the financials, the rest of the group is starting to pick up steam as well and attract bullish option activity. Here are some of the recent trades in WFC and its peers:

Buyer of 6,000 Wells Fargo (WFC) April 62 Calls (exp. 4/26) for $0.28 – Stock at 61

Buyer of 6,000 Citigroup (C) September 57.5 Calls for $6.80 – Stock at 62 (rolled from May calls)

Buyer of 1,000 JPMorgan (JPM) July 185 Calls for $6.65 – Stock at 181

Buyer of 3,400 Wells Fargo (WFC) March 60 Calls for $5.05 – Stock at 57

Buyer of 1,500 Citigroup (C) November 55 Calls for $6.70 – Stock at 58

Buyer of 10,000 Citigroup (C) July 62.5 Calls for $1.37 – Stock at 57

Today let’s get involved with WFC, which as I noted above is the leader in the group, via a December call buy.

To execute this trade you need to:

Buy to Open the WFC December 62.5 Calls

The most you can lose on this trade is the premium paid, or $600 per call purchased.

The risks I see in this trade are pretty straightforward:

First, while the market has rebounded in the last two days, it is possible that this recent buying could fade, and the bears could once again take control.

Second, as always there is sector risk, and perhaps the financials that have perked up as of late could be due to cool off.

That being said, we have been “hiding out” a bit throughout the recent market decline, and we certainly have room to add to the portfolio. And with that in mind, I really like the way WFC has been trading as of late, as well as the bullish option activity in the stock and the sector, and I am going to add the stock to the portfolio today via the December 62.5 calls.