Bearish Options Traders Devour Citi

Discussion in 'Stocks' started by archon, Jul 23, 2008.

  1. archon


    Bears Seize Citi (C) Despite Stock Strength
    Posted at
    in Trading & Technology
    by Frederic Ruffy

    Bears Seize Citi (C) Despite Stock Strength

    Sentiment in Citigroup (C) remains cautious despite a recent rebound in the share price. Shares of the financial services giant closed at $20.89 a share Tuesday, up an impressive 49.1 percent from lows seen the week before.

    In the options market, trading was active, with 150,000 puts and 167,000 call options trading on the day. The action in the December puts was noteworthy. More than 85,000 contracts traded. Some of that activity seems to be tied to spread trading.

    For example, at 13:20 Eastern time, an order of 4,981 December 17.5 puts traded offerside or for $1.77 a contract on the ISE. At the same time, the same number of December 12.5 puts traded bidside, or for $.57 a contract. The activity has all of the signs of bear put spread buying and was repeated several times throughout the trading session. With high levels of open interest, it is possible that these were also closing trades. However, it if more likely to be buying of premium (since this stock is one of the financials on the SEC restricted list for short sellers). If so, the strategists are paying a net debit of roughly $1.20 a spread for a maximum payoff of $3.80 a spread if shares of Citi fall below $12.50 between now and December options expiration...

    rest of article here:
  2. woah, the options market did only 150,000 ish puts and 150,000 calls in total. Geez I thought that there was more activity than that