C – Citigroup, Inc. – A large-volume ratio call spread enacted on Citigroup during the first half of the trading session suggests one big player is positioning for continued share price appreciation through July expiration. Citigroup’s shares gained as much as 6.6% earlier in the session to reach an intraday high of $4.03, but are currently up a more modest 2.65% on the day at $3.88 as of 3:55 pm (ET). The bullish investor paid a net premium of $0.19 per contract to purchase roughly 66,000 calls at the July $4.0 strike, and sell about 132,000 calls at the higher July $5.0 strike price. The spread positions the trader to make money above the breakeven price of $4.19 through July expiration. Maximum potential profits of $0.81 per contract pad the investor’s wallet if Citi’s shares jump 28.9% over the current price of $3.88 to settle at $5.00 at expiration.
Affiliation: Interactive Brokers
Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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