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

Videos

Trades to Watch

Trader Bios

About

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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more

Connect