There were two big pieces of news this week contributing to the run in the financials. First was the Tuesday-night leak that the Treasury would expand the TARP to cover the insurers. Shares of companies like Hartford (HIG) and Lincoln National (LNC) soared over 20% the next day.
Then this morning, Wells Fargo (WFC) came out with its positive pre-announcement and the banks are rallying hard on the news.
So were traders tipped on the news? Maybe.
There was nothing particularly unusual yesterday, but Tuesday there was some very aggressive buying in the XLF (the financial ETF) right at the close.
On Tuesday night, the OptionMonster blog cited “staggering” volume in the ETF — a massive bet right at the close, just hours before the TARP insurance news was set to break. Bear in mind that the XLF includes both banks and insurers.
OptionMonster’s Jon Najarian concludes that both the news and the Wells Fargo news may have been leaked based on this activity.
Business Insider Emails & Alerts
Site highlights each day to your inbox.