The 25-year-old is interested in a move to north London and Spurs boss Antonio Conte is keen to strengthen his squad this month after being alarmed by a series of disappointing displays since succeeding Nuno Espirito Santo in November.
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Traore has 18 months left on his contract and Wolves are ready to cash in on a player who sees his future elsewhere.
Reports in Spain have suggested Barcelona may be interested in Traore. This would complicate the situation as Traore has strong links with the club having been born in the city before coming through the ranks at the Camp Nou prior to leaving for Aston Villa in 2015.
However, sources have told ESPN that Spurs are upbeat over their chances of signing Traore, who is viewed by Conte as a strong wing-back option in his preferred 3-4-3 system.
As ESPN reported on Friday, Conte is planning a clearout of his squad with at least six players available for transfer this month including Tanguy Ndombele, Steven Bergwijn, Dele Alli and Matt Doherty.
Spurs are not under immediate pressure to let players go before they can sign anyone but any funds raised this month will be reinvested in the team either now or in the summer.
Conte is also keen on signing a centre-back, a striker and, ideally, a central midfielder although there is recognition that January is traditionally a difficult month to do business and a major overhaul may have to wait until the summer.