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Unusual Options Activity for Wells Fargo

Posted on March 31, 2009 by Adam

I noticed near the close yesterday that Wells Fargo, (WFC: 27.69 -1.35%), was showing an enormous volume of puts traded.

The April 11 puts traded 130,000 contracts, which is 13 times the open interest. Even if you don’t normally trade, or even pay attention to options, you should still take note.

When this many puts are traded, it is a clear sign that traders are making big bearish bets on the stock. It tells me that Wells Fargo may be the next financial institution to feel the fallout of this crisis.

Keep your eyes peeled. The market will be watching WFC to see what happens. If it gets hit, the market should follow.