Assured Guarantee (AGO) calls saw 25X average volume thanks to one large spread that traded at 12:34pm on the ISE Wednesday. The trader bought 10,000 January $20 calls at $1.27 and sold 10,000 April $20 calls at $2.20 in the short calendar spread for a credit of $0.93 per spread. The Bermuda based credit firm focused on mortgages will report earnings on November 16th. The trade works in fast rising markets with volatility contracting. The 78% implied volatility is well above its historic levels of 58%, so the strategy makes sense in that regard. The trade is likely looking for an earnings breakout with price rising and IV being crushed. Assured Guaranty has breakout potential with the neckline of an inverse head and shoulders at $20.50, and weakness may already be priced in with yesterday’s pre-announcement.