Wells Fargo (WFC) is clearly one of the strongest, if not the strongest, of the major US banks. Amazingly, Wells stock is actually higher now than at the beginning of the year. Meanwhile virtually all of its peers have seen their market prices slashed considerably.
If you are considering being long WFC, let me suggest an alternative. Sell an April '08 36 call for $2.80. This represents a premium of 10% in 5 months (almost 25% on an annual basis). If WFC is flat, you keep the premium for a 10% gain. If Wells is down, you have a 10 % cushion. If Wells rises to the call price of $36, your gain will be almost 40% in 5 months.
Take advantage of the incredibly high volatility and sell call options on stocks you buy (or already own). This method works best when you are cautiously bullish and pick strong companies.
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