$WFC bulls deposit profits

Bullish option traders are banking big profits today in Wells Fargo (WFC).

On Feb. 12, Market Rebellion’s Unusual Activity Service flagged the purchase of 10,500 May $37.50 calls for $1.08 to $1.19 as part of a complex bullish spread with shares at $33.07. Open interest in the strike was only 5,550 contracts before the trade occurred, showing that this was a new position.

Those calls traded up to $7.20 today, at least 6 times their purchase prices. The stock rose 35.05% in the same time period, illustrating the kind of leverage that can be achieved with options.

This marks the second winning trade in the name to be posted on Market Rebellion in just over the last week.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

WFC was up 0.64% to $44.14 at the close today after setting a new 52-Week high earlier in the session at $44.68. The bank’s price target was raised to $48 from $45 this morning at Deutsche Bank.