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Bank investors are getting very nervous

Traders appear to be getting increasingly concerned about the bank stocks.

Bank shares' implied volatility, which measures the magnitude of moves expected in the weeks ahead, has risen precipitously in the month of February.

"There's a great deal of nervousness out there," Dennis Davitt of Harvest Volatility Advisors said in a Tuesday "Trading Nation" segment.

While options prices have also been rising for the market as a whole, the increasing concern around the banks has been notable. As the below chart from Rareview Macro strategist Neil Azous shows, the implied volatility of Bank of America shares has risen precipitously compared to the implied volatility of the S&P 500 (as commonly measured with the VIX).


Here is the same chart again, but with the two lines combined into a single ratio:


Of course, the nervousness extends beyond American banks. Perceived weakness in European financials such as Deutsche Bank appears to have become on of the market's biggest preoccupations.

"If we had to pick one theme to hone in on over the past 24 hours it would be how pronounced the weakness has become in the banks in all corners of the earth," Azous wrote in a Tuesday missive.

The S&P 500 bank industry group has gotten hit very hard in the first weeks of 2016, falling more than 18 percent.

Read MoreBank investors have suffered two lost decades

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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