Options Traders See Regional Bank Death Spiral
Fifth Third Bancorp is attracting heavy call activity as it reaches new 52-week lows.
FITB stock is but a shadow of its $28.58 high from last March, dropping 70 percent last month alone and closing yesterday only a nickel above its new $1.74 low. That was enough to draw options traders, as calls outnumbered puts by 10,000 to 1,700.
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Traders focused specifically on the February 2.5 calls, where buyers stepped up and purchased more than 8,000 contracts for $0.20, according to OptionMonster's Heat Seeker tracking system.
Although FITB's stock ended the day down another 14 percent to finish at $1.79, it was up in after-hours trading at $1.84 last night.
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Major Regional Banks:
Marshall & Ilsley
PNC Financial Services Group