Calls lock in the price investors must pay for the stock, so they can generate major leverage in a hurry if these banks move in the right direction. But if the stocks don’t rally, those options will expire worthless.
Citi shares fell 2.36 percent to $33.97 yesterday, coming off its session lows as the options were bought. Total calls in the name outnumbered puts by 77,000 to 53,000.
Bank of America shares attempted to rebound, but finished near its lows, down 3.25 percent to $8.93.
—Najarian owns C shares and BAC calls.
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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.