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10,000 Wells Fargo October $26 Put Block Trades At 10.23 AM
Someone just traded 10,000 Oct $26 Puts on the ISE. At first blush it appears it was a bid-side trade, and not a roll.
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Warren you sly devil you, are you hedging your WFC position?
or M.Whitney/clients buying...i have yet to see her ever retract her opinion of wfc, which is not very good.
Not much of a hedge if they expire in October. Seems more like a trade.
I hope those puts expire $26 in the money.
Wells Fargo exec partied in bank owned beach home
http://finance.yahoo.com/news/Neighbors-Exec-moved-into-apf-818362254.html;_ylt=AgzgYgrrOwKQEwlgN2i7bJe7YWsA;_ylu=X3oDMTE1bnNpOWdtBHBvcwM3BHNlYwN0b3BTdG9yaWVzBHNsawN3ZWxsc2ZhcmdvZXg-?x=0&sec=topStories&pos=5&asset=&ccode=
Hey somebody had to stay in the home to protect it from vandals.
Also, this could be another chance for the Big O to weigh in on the evils of racial profiling. I'm bet my next paycheck that Charonda (the Wells executive in question) was black and the neighbors were white.
yes, it appears there were too many unfamiliar faces in the neighborhood...http://books.google.com/books?id=vcIDAAAAMBAJ&pg=PA36&lpg=PA36&dq=Cheron...
executive perq?
According to the article, Wells Fargo said in a written statement that the former owner required Wells Fargo to keep the house off the market for a period of time.
Oh really.
Seems like more trickery from the banks to me. Even with all the hocus-pocus accounting gambits running full tilt, none of these banks can actually afford to go through foreclosure (price discovery) and take a loss.
http://www.doctorhousingbubble.com/1-1-trillion-in-toxic-loans-908-billion-in-interest-only-and-198-billion-in-option-arms-the-zombie-loans-that-simply-dont-die/
The issue of shadow inventory is important because many of these banks are simply not moving on homes and ignoring the foreclosure process completely. Not true? Well look at some examples across the country:
“(Cleveland) Renetta Atterberry thought she had lost her East 102nd Street house. So she was shocked to learn in January — five years after her mortgage company filed for foreclosure — that it was still in her name.
Worse, the long-vacant rental home had been vandalized and she faced a raft of housing code violations. Since then, she has been saddled with debts of about $12,000 to pay for demolition and back taxes.
“I thought I had nothing else to do with that home,” said Atterberry. “I was so embarrassed and humiliated by this.”
Her mortgage company didn’t buy the house and never took it to sheriff’s sale to see if somebody else would, leaving Atterberry the legal owner, responsible for upkeep and taxes.
These so-called “bank walkaways” are another troubling development in the foreclosure crisis, particularly in cities like Cleveland with weaker housing markets, say housing advocates and government officials.”
In many other areas, banks are simply walking away from homes. In fact, it is a cold and calculating move. If they take possession of a property, they are responsible for taxes and maintaining the property according to city ordinances. Instead, they do nothing. In their calculus, they figure legal fees and handling the foreclosure process correctly outweigh doing absolutely nothing. You would think with trillions in bailouts banks would have a structured system in place after two long years into the crisis but they are as incompetent as they ever were.
trust me, in the mortgage industry, this is a no-no. regulators are VERY picky about this sort of thing, especially the OCC, who would regulate the bank entity that Wells uses for mortgage.
the head honchos are not even allowed to get a mortgage from their own company. generally employees are not allowed to buy REOs, even if they are willing to pay full price.
this is why the FDIC has been so reluctant to allow private equity firms to buy banks - self-dealing with bank assets is not kosher.
if wells is using REOs as executive perks, the FDIC and OCC will be all over them like white on rice.
"if wells is using REOs as executive perks, the FDIC and OCC will be all over them like white on rice."
You're kidding, right?
You mean the same FDIC and OCC that have failed in their oversight on everything else, is somehow going to crack down on this.
Not a chance
That is probably what this bet is about - the political fallout from that story should be enormous. Here is how I see it playing out - this really pisses off a lot of large depositors, who start pulling out their money. This cascades into a bank run, which takes them down.
People are fed up enough about these banks, and this could be a catalyst to get people to pull deposits. With the amount of leverage at a bank, it doesn't take much to start the avalanche - a 10% deposit loss is huge for a bank.
52.321% impl vol. I have to believe the trader is selling the vol. I'd look for WFC to trade higher before leveling off and the vol drops.
Citicrap Oct $4 put options are trading with IV of 62%. Much deeper out of the money in terms of %--WFC cheaper, relatively speaking. Don't believe it was a seller on WFC...
pretty huge notional for a 31 Delta option with 1 mo until expiry
I posted this under the Carry Trade thread:
More big put buying in WFC today. 10000+ at 26 strike in OCT. Spurious activity in BAC--nearly 10000 puts at 16 and 17 in Oct but 10000+ in 17 and 18 calls. Not matching up like yesterdays WFC January simultaneous trade of selling 100,000 puts struck at 20 and buying 50,000 struck at 25. Given who owned 25% of BAC at the end of Q2, I would be wary of any BAC activity. Furthmore, over 27000 puts of C struck at 4 in Oct. today. Fun fun fun...
Who would be stupid enough to buy these?
WFC backratio is not too bad. you earn some +theta. and if the stock drops, you profit too.
I made some screenies for you.. we all like screenies. http://finpic.blogspot.com/2009/09/caught-large-wfc-trade-yesterday.html
Sorry but I don't believe that HFT and Flash can define the delta and the dmz any better than the american military did it in vietnam.
Bolds well for my Jan $15 puts on this piece of junk bank. I have $5 puts on AIG as well - all crap. I will probably be on the losing end of this trade considering market activity is pretty cooked in recent weeks.
Man, I went to the Wells Fargo ATM and they wanted $3 just so I could get my $20 out! So I went to the gas station next door and it was only $1.50! Then I bought 10000 puts!
;)
Not a bad play, holding it on a distressed bank over a weekend in Sept & Oct... if that was a buyer (regardless of IV%, that price is not terribly expensive - even for WFC, which trades with a considerably higher premium on puts compared to the other big banks).
Maybe waiting until 3:58 to run the buy might be more favorable, but you'd have to have it arranged already.
agreed.... 90cents is not enough for me to write against a crap bank like WFC.
I think we're talking about buying puts--option market makers lay off the risk by trading delta neutral and selling the stock. The put seller is not taking the risk on a block trade because they are hedging it at the time the trade is done.
This is why I'm a muni trader....:) Thanks for the clarification....
Bolds well for my Jan $15 puts on this piece of junk bank. I have $5 puts on AIG as well. I will probably be on the losing end of this trade considering market activity is pretty cooked in recent weeks. Ahhh, bank failure friday has come. Enjoy your weekend everyone!
Bodes
I might add watching the AIG Sep put option chain is like watching flickering Christmas tree lights.
go get your money back while you can
this is your last chance.
Are we back to this? Don't be an idiot.
go back to CNBC, clown.
Any merit to speculating on the continued dollar down - obama schedules a speech on crisis. any way to track if the major banks are hedgeing dollar in anticipation of an event which would be of course pre arranged with the banks to prevent against losses per an fdr like event? Why is the us intel community coming out now saying iran has crossed a threshold when the Mossad has been saying such for 2 months. is the US presence in Afghan about pincer on iran rather than any care about Tali? Russia say no sanction on Iran. If Israeli goes would the US accomidate its planes in the Afghan desert? Would dollar rally on such an event or would it be perceived as long ball?
I would think a decent world event would spark gold most and USD second.
Gold seems to be sparking just fine today without any world events... can you imagine what it would do with an actual event... I think Citi's prediction of $2000 would become relevant very quickly...
Netanyahoo cannot wait to poke Iran in the eye.
I think it happens soon.
I agree 100%... it will happen... he will not want history to attribute his inaction as the reason Iran joins the Nuclear Power Club.
any guess on the conversation between Netanyahu and Putin the other day?
All I can say is it must have been interesting... don't think they have a lot in common... what do you think?
Ben: Nice tie Vlad
Vlad: What the fuck is that supposed to mean? Are you implying you are even with us?
Ben: Is that a Hermes?
Vlad: Did you just say I have Herpes? I don't have Herpes and if I did I wouldn't tell you.
Ben: I just thought...
Vlad: Yeah, you just thought that you are the equivalent to my great nation and that I have Herpes.
Ben: How's that negative GDP working for you?
Vlad: Eat me, you little terrorist.
LOL... the next Jon Stewart...
Ha...
This is interesting. There is a story going around about a false flag execution in Washington D.C on October 19th.
What's a "false flag execution"? Thank you.
911 was a false flag that went live on 911. False flags are multi-service practices for a major event. During the practice, it becomes real. Google "false flag"
911 was a false flag that went live on 911. False flags are multi-service practices for a major event. During the practice, it becomes real. Google "false flag"
how is this helpful? anonymous poster cites some "story" (read:rumor) going around about a false flag operation. where did you hear this? from whom? when? do you have any details? why should we listen to this?
provide a source or some credible information or don't bother.
There were massive amounts of sell orders for American and United Airlines in the run up to 911. There is a currently a need to have a reason for a financial collapse.
In case your head has been in the sand, there have been numerous national guard units moving into the DC over the last several months to guard the Capitol from "terrorist." Those reports are easy to find.
none of this addresses my point. You are correct that there was selling of UAL and AA in the runup to 911, but I did not see any evidence or claims that this is occurring today. You simply said something vague about a "false flag" operation. Connect the dots for me on this. Also explain your contention that "there is currently a need to have a reason for a financial collapse". This sounds like opinion, which is fine, but I'd be interested to know how you got there. You saying it does not make it a fact.
My head is generally not in the sand (but thanks for the condescending remark), but your point about "numerous national guard movements into DC" proves absolutely nothing. The implication you have made is that such movements are unusual. I am far from a military expert, so enlighten me as to the relevence of this event.
I see no facts or evidence to support anything that was said. That's all I'm looking for.
The voice of reason... thanks...
I have no ax to grind. It's a short wait.
This really isn't that much $ is it, in the big picture??
Tyler, would you mind explaining the term "bid-side trade"?
Also, given the common claim that nearly all options expire worthless, what is the significance that some big market-maker of options was willing to take the sell saide of this trade?
Read up on trading delta neutral. Market makers hedge when they sell puts by selling the proportionate amount of shares relative to the strike. They then manage this in real time by buying and selling shares to stay hedged. The market maker buys volatility low and sells vol high. They typically do not take a stand on the direction of the market.
Thank you for the explanation.
I'm guess it was put buying due to WFC showing their gross incompetence today by actually have the nerve and stupidity to downgrade AIG.
Wells Fargo is Chernobyl.
http://www.businessinsider.com/cant-use-your-home-as-an-atm-well-then-how-about-your-car-2009-7
Another Whopper today....Huntington Bank bet on 5 trading days til expiry. 28000 puts struck at $4 for 10-20 cents. With it nearly at the money, the IV is .81 on an average price of .15 cents. Also, Key Sep ATM put volume over 23000. Yeehaw!
Have to love the bets on FDIC Fridays as events start to play out (even though FDIC has to be on 'holiday' until Congress gets around to it).
Smells a lot like right before Bear Sterns collapsed. Lots of put action substantially below market price with a very short expiry.
I will be closing my accounts with WFC within the next few weeks. Long overdue.
Crazy. You better do it sooner.
no doubt, unforunately too many hooks via auto pay and the such to coordinate it all at once.
Yeah, took me several weeks (had to unhook Paypal, etc) but it sure felt good when I did it.
And the HAL 9000 casino traders are heatmapping casinos.
Heh
Sym:MTM
I remember looking at those October $26 WFC puts just yesterday. The volume was nearly 60% of open interest!
Wells Fargo party house sure has a weekend at Bernie's flavor to it, no
if there's smoke, there's fire.
keep shorting. don't use margin, no margin no squeezes
Confirmed....it was Lenny Dykstra.
you can always feel good about yourself for not being Lenny :-)