Here’s how Citi, JPMorgan and Wells Fargo could move when they report earnings this week

Three of the big Wall Street banks report quarterly earnings at the tail end of this week. For investors looking ahead to Citigroup, Wells Fargo and J.P. Morgan Chase earnings on Friday morning, the options market appears to be saying, “Nothing to see here.”

Stacey Gilbert, head of derivative strategy at Susquehanna, explained Tuesday on CNBC’s “Trading Nation” what the options are implying for shares of the big banks later this week.

• Financial stocks don’t typically see extreme moves on their earnings reports, but are among the most important watchers during earnings season.

• Shares of Citigroup, Wells Fargo and J.P. Morgan usually see a move in the ballpark of 2 percent in either direction following their reports. Right now, the options market is implying a move of less than 2 percent for each of these names.

• Notably, while the trend is broadly bullish across the financials’ exchange-traded funds, the options are not implying any particularly outsize moves for the individual names. For investors who’d like to protect any recent gains, the options are relatively cheap at current levels.

• The financials have not fared well this year, with the sector falling nearly 3 percent year to date while the market has risen 4.5 percent. While Citigroup has sunk more than 8 percent this year and Wells Fargo is down nearly 7 percent in the same time frame, J.P. Morgan shares are barely negative on the year.

Bottom line: The options market is pricing in smaller-than-usual moves for some of the big banks reporting later this week.

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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.

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 CNBC and 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

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