By Jud Pyle, CFA, chief investment strategist for the Options News Network

Shares of Altria Group ( MO) are up more than 12% since closing $14.62 on March 3. The stock has had bullish tailwinds ever since March 4, when the company announced price increases. And, of course, Tuesday's monster rally did not hurt.

Today we saw large call volume in the March options. But don't be fooled into thinking this is something related to the fundamentals. This is just an option strategy related to the fact that the stock trades ex-dividend tomorrow.

The MO March 15 calls have traded more than 240,000 times vs. open interest of 11,809. The March 14 calls have traded more than 130,000 times vs. open interest of 3331. The April 14 calls have traded more than 52,000 times vs. open interest of 2321.

With the stock trading around $16.39, down 21 cents, with the rest of the market up a little more than half of a percent on the day, you might ask: "Was this a bullish investor buying calls that are way in the money instead of buying stock"? Or was it a bearish investor selling calls rather than shares?

The answer, in fact, is neither. This trade is neither bullish nor bearish. Instead, it was a trade designed to take advantage of the fact that shares of MO will trade ex-dividend tomorrow.

Because the shares will trade ex-dividend, the March 14 and 15 calls and the April 14 calls are technically an exercise. They are technically an exercise because holders of call options do not participate in the dividend. So rather than hold the calls, the owner of the calls should exercise them and get the shares, and get the dividend.

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