The week's wave of upgrades was connected with ETFC's capital-raising efforts. The online brokerage raised $550 million this week through a common stock offering, effectively bolstering its capital cushion.

In the options pits, this week's news has prompted a flood of call volume. In fact, call open interest for the July and August options series more than doubled overnight, spiking by 104%. ETFC's August 1 call was far and away the most popular strike, with volume of 49,974 contracts crossing the tape yesterday on open interest of just 438 contracts. Open interest at this in-the-money call arrived today at 49,826, confirming that most of the day's transactions were newly opened positions.

However, a closer look at the data reveals that nearly all of the volume at the August 1 strike changed hands at the bid price, indicating they were likely sold to open. Assuming that traders are, in fact, selling premium at this strike, they're making a bet that ETFC will be pinned beneath $1 through the next couple of months.

These options are already in the money by a narrow margin, which means these call sellers could potentially be assigned. However, assignment probably won't become a truly pressing concern until these contracts lose more of their time value; they still have roughly eight weeks until expiration. Of course, it's also possible that these call writers are hoping to be assigned, potentially because they're looking to unload their investment in ETFC.

In short, the recent flood of call volume on ETFC is hardly bullish in nature. Option traders seem wary, at best -- probably the most appropriate stance, considering the security has languished below $3 per share since October 2008.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.