Options Bet Against Southern Regional Bank
By: Synovus Financial is plunging along with heavy options volume, a day after the regional bank holding company reported dismal quarterly earnings.
SNV stock is down more than 20 percent in Thursday afternoon trading to $3.23, far closer to its 52-week low of $2.30 than the high of $13.17 reached back in September. The company's average daily options volume is 908 contracts, but more than 19,000 have traded so far today, according to OptionMonster's real-time tracking systems.
Most of the options action has been concentrated at the June 2.50 strike, where more than 5,200 puts have traded against open interest of just 230 contracts. One particularly large block was bought this morning at $0.35.
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Synovus has been hurt by a massive rise in loan losses and said it expects a difficult second quarter as well. The bank has already cut its dividend twice in the last few months.
Disclosures:
I own long puts in SNV.
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Options Education:
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Rival Mid-Atlantic Banks & Holding Cos.:
BB&T
First Citizens Bancshares
United Bankshares
Wilmington Trust
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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.
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