Related Link: How To Read And Trade An Options Alert Why It’s Important For Citigroup Investors: Even traders who stick exclusively to stocks often monitor option market activity closely for unusually large trades.
The most obvious explanation for the large call purchase on Wednesday is that a deep-pocketed trader simply believes Citigroup is going to report some impressive fourth-quarter earnings numbers on Friday morning.
The Federal Reserve recently greenlighted bank buybacks starting in the first quarter, so Wednesday’s large option trader may even be more focused on Citigroup’s 2021 guidance than its fourth quarter.
Benzinga’s Take: The large option trader may be betting that Citigroup’s guidance will blow investors away given high expectations for bank buybacks, another major stimulus package and a rebound in the overall U.S. economy following vaccination rollouts.
One trade stood out because of its size and the expiration date of its contracts: At 10:04 a.m. EST, a trader bought 3,498 Citigroup call options with a $55 strike price expiring on Friday.