Trade Alert – (WFC) July 16, 2025 – BUY

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert – (WFC) – BUY

BUY the Wells Fargo (WFC) August 2025 $65-$70 vertical BULL CALL debit spread at $4.60 or best

 

Opening Trade

7-16-2025

expiration date: August 15, 2025

Portfolio weighting: 10%

Number of Contracts = 25 contracts

This is a conservative trade in one of the most successful sectors in the market. I don’t normally buy stocks short of all-time highs, but in (WFC)’s case, I will make an exception.

Interest rate stocks are finally starting the move after being beaten senseless for the past nine months. The market is starting to discount the appointment of a new Fed governor in May. The president has promised to cut interest rates by 300 basis points with his next appointment. This would be a boon to banks.

US Treasury bonds are approaching their lows for the year (TLT), so this is. Good day to buy interest-sensitive. The play this summer may not be a selloff, but a rotation out of tech into interest-sensitive.

Wells Fargo is the cheapest large bank in the market. This is because for the last decade they have been set back by an endless series of fines for their dubious business practices. They also faced capital restrictions. Getting caught stealing from churches because they were too dumb to notice is not good for business. It is terrible for the share price.

However, new management is now in place and a turnaround is underway. The administration has lifted remaining restrictions and forgiven fines as part of its deregulation play. Little known is that Wells Fargo has the fifth-largest shareback policy in the country, with up to $40 billion in purchases. Wells also has a respectable options implied volatility of 40%.

If you can’t do options, buy the stock. My long-term target for (WFC) is $100, up 31% from the recent low.

If you want a less volatile position, you can buy the Financial Select Sector SPDR ETF (XLF), a basket of stocks in the industry.

Therefore, I am buying the Wells Fargo (WFC) August 2025 $65-$70 vertical BULL CALL debit spread at $4.60 or best.

Don’t pay more than $4.75 or you will be chasing.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a range of limit orders and work them.

If you don’t want to sit in front of a screen all day or live in a foreign time zone when the US stock market is closed, such as Australia, simply enter a spread of Good-Until-Cancelled orders overnight, like $4.60, $4.65, $4.70, and $4.75. You should get done on some or all of these.

For details about Wells Fargo, please click here to visit their site.

This is a bet that the (WFC) will not fall below $70.00 by the August 15 option expiration in 22 trading days.

Here are the specific trades you need to execute this position:

Buy 25 August 2025 (WFC) $65 calls at………….………$65.00

Sell short 25 August 2025 (WFC) $70 calls at…………$60.40

Net Cost:……………………………..………….………………….$4.60

Potential Profit: $5.00 – $4.60 = $0.40

(25 X 100 X $0.40) = $1,000 or 8.70% in 22 trading days.

 

 

 

 

 

If you are uncertain about how to execute an options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.

Don’t execute the legs individually, or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.