February 4, 2023

Banks Up & My WFC Diagonal : options

Banks shot up today reacting to the 10-year yield rising above 1.6% (weird to even say – it’s so low in context but for recent levels, this is “elevated”).

10-year coupon falling from the yield increase

r/options - Banks Up & My WFC Diagonal

Wells Fargo jump

I had a LEAP Call Diagonal established that I ended up closing in 3 days (I set these trades up to hold for 9-10 months normally). Trade details below:

r/options - Banks Up & My WFC Diagonal

Not any sort of significant $ return, but in this case, 7.9% ROIC in 3 days made me take a look at pulling the trade down. I had the ability to pull another $250 or so in so I opted to take the trade down on the move today (not expecting any significant continuation) and will re-visit banks after earnings. I still think they’re great products for the year w/ the rate raises pending.

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