Put spread is bullish on Exelon

A day before it reports earnings, Exelon is seeing a put spread that is actually bullish.

optionMONSTER systems show that a block of 5,000 June 37 puts was bought for the ask price of $1.55 and the same number of May 37 puts were sold for the bid price of $1.15 today. Volume was far above previous open interest of fewer than 300 contracts in each strike, indicating new positioning.

The trader pays $0.40 to open this calendar spread, which is the most that can be lost before the May expiration and could occur if EXC makes a big move higher or lower. The maximum gain would be realized with the stock right at $37, as the spread is designed to take advantage of the fact that the nearer-term options have greater time decay.

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