CHICAGO, April 14 (Reuters) – Citigroup Inc (C.N) (C.N) option volume swelled on Tuesday as traders made bullish and bearish plays on the stock and adjusted positions ahead of Friday’s quarterly results and April options expiration.

Citigroup was the top option name as about 2.46 million calls and 1.11 million puts traded, three times the average combined daily volume, according to option analytics firm Trade Alert.

The flurry of option activity was accompanied by sharp gains in Citigroup’s stock on expectations of strong earnings, one day after Goldman Sachs Group Inc (GS.N) posted a better-than-expected quarterly profit.

The shares rose 5.53 percent to $4.01, after rising as high as $4.48, their best level since mid-January.

Citi, the third-largest U.S. bank by assets, is due to report first-quarter results on Friday, the same day when April individual options and options on some stock indexes go off the board after the close.

“Much of the aggressive volume in Citi can be attributed to expiration-related trading where traders rolled out their expiring April options to primarily May and June options,” said Joe Kinahan, chief derivatives strategist at online brokerage firm thinkorswim Group in Chicago.

Speculators also appeared to enter the fray and favored call options, which give buying rights to Citi shares.

“Traders are buying both Citigroup calls and puts but there is bias on the call side because investors have turned more positive on the financial sector,” said William Lefkowitz, options strategist at vFinance Investments in New York.

In the early afternoon, one investor bought 100,000 May $5 strike price calls, paying 59 cents to 64 cents a contract, possibly positioning for continued upside through Friday’s earnings and into next month, said Trade Alert President Henry Schwartz.

Not only was volume robust but total call and put open interest at the June $5 strike price is more than 3 million contracts, “largely built up as professional traders have shorted June $5 synthetics against preferred shares,” he said.

The June $5 strike price had attracted a lot of conversion trades because the stock is hard to borrow, analysts said.

In a conversion, an investor purchases the underlying stock and offsets this by buying a put and selling a call with the same expiration and strike price and is often viewed as a synthetic short stock position.

Adjustment of these positions is likely to keep Citi a volume leader for the immediate future, Schwartz said. (Reporting by Doris Frankel; Editing by Leslie Adler)