On Thursday, the traders were closely watching the action in bank stocks after Citigroup shares closed lower; its $20 billion secondary offering got a cool reception from the Street.
Also BofA landed in the spotlight again, after the company said it had tapped insider Brian Moynihan as its next chief executive, ending months of speculation about who would succeed Kenneth Lewis to lead the largest U.S. bank.
Also in the space, the traders noted Meredith Whitney's decision to cut earnings estimates for Goldman Sachs and Morgan Stanley .
Whitney now expects Goldman to earn $6 a share in the fourth quarter, down from a previous estimate of $6.38 a shares. On average, analysts surveyed by Thomson Reuters are expecting earnings of $5.59 a share.
What’s the bank trade?
Goldman has been underperforming since mid-October reminds, Guy Adami. It may be a canary in the coal mine.
As for BofA, it closed below $15 and Wells Fargo is trading above $20, Adami adds. For a trade I'd get long BofA and getting short Wells against it.
I'd also look at a long BofA and short WFC pairs trade, echoes Paul Miller of FBR Capital. Wells valuations looks rich. And I think BofA goes to $20.
I’m also a buyer of BofA at $15, adds Karen Finerman.
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Trader disclosure: On December 17th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (FXI), (INTC), (TSO), (GE), (EEM); Finerman's Firm Owns (MSFT), (NOK), (AAPL); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spreads; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (UNG); Najarian Owns (ORCL) Jan. Calls, Is Short (ORCL) Dec. Calls; Najarian Owns (AAPL) Calls; Najarian Owns (FCX) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (MS); Najarian Owns (RIMM) Jan. Calls, Is Short (RIMM) Dec. Calls; Najarian Owns (UUP) Call Spread
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