By Pete Najarian, co-founder of OptionMonster
NEW YORK -- Citigroup (C) doesn't need to hit new highs for traders to make big money.
Option activity was rocking in the financial giant Wednesday, with more than 64,000 calls outnumbering fewer than 31,500 puts. One big trade stood out in particular on OptionMonster's tracking systems, as 2,004 April 43 calls were sold for $2.30 and twice as many May 46s were bought for $1.09 and $1.10, indicating that an investor is rolling a long position to a higher strike price one month later.
Calls lock in the price where traders can buy shares, so these contracts will can generate significant leverage if Citi rallies in the next month. Rolling the contracts up in price and out in time indicates that the trader is confident that more gains are on the way.Citigroup shares rose 2.54% to $45 Wednesday. The stock is still almost $3 from its peak of $47.92, even as other financials run to new highs with major equity indexes in record territory. Najarian has no positions in C.